The Premium ACA Tax Credit: What’s the Advantage and Who Qualifies?
While it won’t affect your 2013 tax return, you might be eligible for the premium ACA tax credit if you can still fulfill the March 31, 2014 open enrollment deadline for buying insurance coverage through the Marketplace.
Find Out If You’re Eligible
The premium tax credit makes insurance protection more inexpensive for those with low or moderate incomes. Generally, those qualified for the ACA tax credit satisfy all the list below requirements:
- Health insurance acquired through the Marketplace by the March deadline
- Denied eligibility federal government plans like Medicaid, Medicare, CHIP, or TRICARE
- Unable to manage an eligible minimum worth company protection plan
- Household income lies in between 100 percent and 400 percent of the federal hardship line, translating to $11,490 to $45,960 for one person, $15,510 to $62,040 for a family of 2, and $23,550 to $94,200 for a family of four
- Do not file a Married Filing Separately tax return
- Cannot be declared as a dependent by another person
Household earnings is determined by including your modified adjusted gross earnings to the income of individuals in your family who certify as personal exemption deductions on your tax return.
As for company strategies, the ACA deems minimum value strategies inexpensive if self-coverage premiums do not exceed 9.5 percent of your family earnings. To determine if your employer’s plan satisfies minimum value requirements, ask your employer to reveal you the strategy’s Summary of Advantages and Protection”, which will indicate protection details.
ACA Tax Charge Means Extra Work and Costs for You
The federal government calls it the Person Shared Duty Provision”. If you can pay for to meet the obligation and don’t, you need to pay the ACA tax penalty, and you’ll still have to pay all of the year’s medical bills.
Depending on your income level, the tax charge will either be 1% of your annual family earnings, or $95 per single adult. Tax charges for households top out at $285 for the first year.
You’ll be required to pay the charge if:
- You’ve been uninsured for more than 3 months
- Your coverage does not satisfy ACA minimum vital requirements
- You neglected to purchase insurance coverage through the Marketplace by March 31, 2014
- Your protection is restricted to vision, oral, a specific disease, or is only workers’ comp
Obamacare Exemptions for Those Experiencing Life’s Roadblocks
Some people with extenuating life scenarios may be qualified for ACA exemptions, waiving the ACA tax penalty.
Exemption eligibility requirements consist of:
- Coverage gaps of less than 3 successive months during the year
- Membership of a religious sect that is opposed to ACA stipulations
- Membership of a federally acknowledged Indian people, or eligibility for Indian care services
- Qualifying challenge circumstances such as job loss, earnings changes, homelessness, eviction, natural disasters, and other cases
- Coverage unaffordability due to minimum quantity required going beyond 8 percent of home income
- Income level lower than tax return filing threshold
- Incarceration status
- Undocumented immigrant status
For any other concerns on ACA legislation, EInsurance is standing by with the answers.