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3 Things to Know about the ACA and the Premium Tax Credit
May 8, 2017
Whether you’re choosing your own health care plan for the first time or a seasoned career person who knows their plan needs in and out, there’s still a lot of confusion around the Affordable Care Act, especially as it relates to the Premium Tax Credit.
The Affordable Care Act is meant to provide most Americans with access to necessary health care options, but some still find they may need help paying for that coverage. This is where the Premium Tax Credit comes in as a means to alleviate some payment woes.
Here are some of the most commonly asked questions:
Do I qualify for the credit? There are a number of ways to qualify for the Premium Tax Credit:
You are not eligible for other coverage, such as through your employer or government agencies. You are not claimed as a dependent by anyone else. You file a joint tax return if married (not using Married Filing Separately Status). You bought insurance through the Health Insurance Marketplace. You meet certain household income requirements (i.e. your estimated income falls between 100% and 400% of the federal poverty level).
How can I claim the Premium Tax Credit? While there are other sources to purchase health insurance, the only way to claim the Premium Tax Credit is to buy insurance through the Health Insurance Marketplace at healthcare.gov. Once you’ve purchased insurance, if you qualify for the tax credit, then you have two options when it comes to claiming it. First, you can lower your monthly insurance premiums by claiming the credit throughout the year. Or, you can choose to decrease your overall tax bill or increase your tax refund by claiming the credit on your tax return.
How much will my credit be? Your credit amount will be calculated on a sliding scale If you have a lower household income, you can expect a higher credit. Additionally, when opting to receive credit throughout the year, the Premium Tax Credit is refundable, meaning that if, at the end of the year, you have used less than the final credit amount, you’ll be refunded the difference.
For more information or to learn your health care insurance options, visit healthcare.gov.