If you have health insurance coverage through the Health Insurance Marketplace, be sure to check your eligibility for the Premium Tax Credit. The Premium Tax Credit is one of the Affordable Care Act Tax provisions that can help individuals and families afford health insurance coverage purchased through the Health Insurance Marketplace. The tax provision has several eligibility requirements that must be met before claiming the credit. You must meet all of the following to qualify:
Purchase coverage through the Marketplace, have household income for the year between 100 percent and 400 percent of the federal poverty limit for your family size,
Are not able to get affordable coverage through an eligible employer plan that provides minimum value,
Are not eligible for coverage through a government program, like Medicaid, Medicare, CHIP or TRICARE,
Must file a married filing jointly tax return unless you are a victim of domestic abuse; and cannot be claimed as a dependent by another person.
The amount of Tax Credit it based on your income level, those who have a lower income get a larger credit to help cover the cost of their insurance. In other words, the higher your income, the lower the amount of your credit. If eligible, the insured can choose to get the credit paid in advance or wait to claim the credit with their tax return. A federal income tax return must be filed if the insured chooses to get the credit paid in advance or waits to claim the credit. Everyone signed up for health insurance coverage through the Health Insurance Marketplace should review the eligibility requirements annually to be sure to take advantage of the Premium Tax Credit.
Example:
John Howard has health insurance coverage through the Health Insurance Marketplace, he is not eligible for any other coverage, and has a family of four with a household income of $41,000.
John must satisfy the three tests for eligibility:
1) Signed up for coverage through the Health Insurance Marketplace
2) Have a household income between one and four times the poverty line. A family of four’s income thresholds would be between $23,550 and $94,200 for 2014.
3) Can’t be eligible for other coverage such as Medicare or Medicaid.
John Howard is eligible for the credit since he passes all three tests.
If you have any questions regarding the Premium Tax Credit or your eligibility, please contact our office.
