The exclusion of up to $5,000 for death benefits no longer applies. It had applied only for employees who died before August 21, 1996. Only a death gratuity paid to a survivor of a member of the Armed Forces continues to be excludable from gross income.
This is generally adjusted gross income increased by certain items such as tax-free foreign earned income. MAGI usually is used to determine phaseouts of certain deductions and credits.