What kind of tax credit do you get for health insurance premiums?
From 2014, if you obtain health insurance coverage through the Health Insurance Market, you may be eligible for the premium tax credit. This tax credit can help purchase health insurance coverage more affordable for people with moderate incomes. The open enrollment period to buy health insurance coverage for 2014 through Market begins October 1, 2013 to March 31, 2014.
Tax Credit For Health Insurance Premiums
If you buy health insurance through your state’s health insurance Marketplace, also called an Exchange, you may be able to get some financial help. The health care reform law helps lower the cost of health insurance for families with low to moderate incomes who make too much money to qualify for Medicaid. There are two main types of financial help: premium tax credits and cost-sharing subsidies. The amount of tax credit you qualify for depends on your income and the size of your family. In addition, households with lower incomes may qualify for subsidies to help lower the cost of doctor visits, hospital stays, and other types of medical care.
Eligibility Requirements for Health Insurance Tax Credit
Usually, you may be eligible for the credit if all of the following:
- purchase health insurance through the Market;
- is not eligible for coverage through an employer or government program;
- is within certain parameters of income;
- filing a joint return, being married, and
- can not be claimed as a dependent by someone else.
If you are eligible for the credit, you can choose:
- Get It Now: all or part of the estimated credit may be prepaid directly to your insurance company to reduce the amount you pay out of pocket for your monthly premiums during 2014, or
- Get It Next: wait to receive all the credit when filing their 2014 tax return in 2015.
To qualify for the credit, you must get their insurance through the ObamaCare Market .
During enrollment through the market, using the information you provide about your expected income and family composition in 2014, the market will calculate the amount of tax credit bonus you can claim for tax year 2014 you be presented in 2015.
Then you decide if you want the total, part or none of their estimated credit is paid in advance directly to your insurance company.
For any tax year, if you receive any amount for advance payments of the credit, or if you claim the premium tax credit, you must file a federal income tax on income for the year.
Health Care Premium Tax Credit Information
If you choose to get it now: When you file your 2014 taxes in 2015, you subtract the total of advance payments received during the year the amount of the premium tax credit calculated on your tax return. If the premium tax credit calculated on your return is more than the advance payments have been made on your behalf throughout the year, the difference will increase your refund or reduce the amount of tax you owe. If advance payments of the credit is more than the premium tax credit, the difference will increase the amount you owe and will result in either a smaller refund or balance due.
If you choose to get it later: You claim the full amount of the premium tax credit when filing your 2014 taxes in 2015. This will reduce your refund or increase your balance due.
Income for Health Care Credit Eligibility 2015
You may be eligible for a tax credit if the amount of money you expect to make for all of 2015 is in the following income ranges:
- $11,670 to $46,680 for one adult
- $15,730 to $62,920 for a family of 2
- $19,790 to $79,160 for a family of 3
- $23,850 to $95,400 for a family of 4
When to Notify Health Insurance Marketplace
Notifying the Marketplace about changes in circumstances will allow the Marketplace to update the information used to determine your expected amount of the premium tax credit and adjust your advance payment amount. This adjustment will decrease the likelihood of a significant difference between your advance credit payments and your actual premium tax credit.
Changes in circumstances that can affect the amount of your actual premium tax credit include:
- Increases or decreases in your household income.
- Birth or adoption of a child.
- Other changes to your household composition.
- Gaining or losing eligibility for government sponsored or employer sponsored health care coverage.