I think it is correct to say that all taxpayers are affected by the Affordable Care Act in some way. Certainly individuals living in the US. All must answer a question on the 1040 as to whether everyone in the “shared responsibility family” (basically those listed on the return), had health coverage for all months of the year. If there are any uncovered months, the next step is to see if an exemption applies for that month. If no exemption for any month, a penalty is computed and reported on the 1040. Read More
To be eligible for the Premium Tax Credit under the Affordable Care Act, all of the following must apply:
• Your income must be between 100% and 400% of Federal Poverty Line (see below) for a given family size.
• You cannot be claimed as a dependent.
• If married, you must file a joint return (although some exceptions may apply).
• You must be enrolled in a qualified health plan through Marketplace.
• Cannot be eligible for other minimum essential coverage.
• Premiums must be paid.
The Premium Tax Credit (PTC) for individuals who purchased health insurance on the Exchange (Marketplace) is an important tax break. As income goes up, this subsidy in the form of a refundable credit decreases. Then, it hits a cliff and completely disappears if one’s household income exceeds 400% of the Federal poverty line (FPL). This can result in a tax bill of thousands of dollars!
Here is an example. A married couple, both age 64, thought their 2014 income would be about $62,000. Being eligible for insurance on the Exchange, they purchased a policy and obtained a PTC of $14,112. When they file their return, they realize they actually have $63,000 of income for 2014. this is above 400% of the FPL so they must repay all of the $14,112 PTC! If they can drop their income to $62,040 (400% of the FPL for 2014), they Read More