Money in Your Pocket: How to Figure Out If You Qualify for Health Insurance Tax Credits
The rising cost of healthcare is currently at the forefront of national conversation. So much so that addressing the affordability of healthcare is one of the top issues Americans want president-elect Donald Trump to prioritize during his first 100 days in office.
But the fact is that there's a substantial part of the population that won't feel the effect of rate hikes because of premium tax credits. Tax credits can help lower the amount you pay every month if you're buying your health insurance through the Marketplace. And we’re here to help you figure out if you qualify.
How to qualify for premium tax credits
Before you get lost in daydreams of how much money you’ll save, you need to ask yourself a few questions:
- Can someone else claim me as a dependant?
- Am I eligible for coverage through Medicare, Medicaid, CHIP, and TRICARE?
- Do I have access to affordable coverage through an employee-sponsored plan that provides minimum value?
If you answered yes to any of those questions, then, unfortunately, you don’t qualify for tax credits. But if you answered no to all of those questions, then 1) you’re still reading this article (yay!) and 2) there’s just one more thing we need to know to determine if you’re eligible.
You see, the size of the discount you receive depends on how much money you make. The more money you make, the less you will receive and vice versa. But to get a 2017 tax credit, your estimated income for 2017 will have to fall within the following ranges.
Using your premium tax credit
The great thing about tax credits (other than lower health insurance costs) is that you get to choose how you receive your discount. You can 1) get the entire tax credit in advance, 2) get part of it in advance, or 3) you can wait and deduct the discount on your tax return.
Choose number 1 or 2 if you’re sure of your estimate 2017 annual income. Number 3 is your safest bet if your annual income is unpredictable or if you want a bigger refund during tax season.
There’s one more thing that you need to remember: It’s important that you let the Marketplace know of any changes in your income or family size throughout the year. You don’t want to underestimate your 2017 income and then end up owing money on your tax return. In the same vein, you don’t want to overestimate your 2017 income and end up losing out on savings during the year. You can keep track of any life changes by logging into Healthcare.gov.
Let us know if this article was helpful either through Twitter (@hellojoany) or by dropping a comment below. We’d love to hear from you and answer any questions you may have!