True or False: The MAGI methodology follows a formula that combines a consumer's taxable income with certain non-taxable income then subtracts any applicable deductions.

The statement is true because the Modified Adjusted Gross Income (MAGI) methodology is indeed a formula that combines a consumer's taxable income with specific non-taxable income. The purpose of MAGI is to determine eligibility for certain programs, such as Medicaid and premium tax credits under the Affordable Care Act.

To arrive at MAGI, one starts with the Adjusted Gross Income (AGI), which is the total taxable income after specific deductions. This AGI is then adjusted by adding back certain non-taxable income sources, such as interest from municipal bonds and the foreign earned income exclusion. After combining these components, any applicable deductions or exclusions specific to the determination are taken into account to produce the MAGI figure.

Understanding this methodology is crucial when it comes to assessing eligibility for various public benefits, as MAGI is a key determinant in calculating access to these programs. The other options focus on different aspects of income consideration, such as only non-taxable or taxable income, which do not accurately capture the full picture of MAGI's calculation process.