Introduction to Tax Credits and Subsidies
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Check out our Calculators and Quote Engines which we believe are easier to use, save your results and better than Covered CA’s for your subsidy and tax calculations to help pay your premiums.
Please do these calculations FIRST, before calling 310.519.1335 or emailing us for your FREE initial consultation or ongoing service, once you’ve appointed us as your agent (instructions) so that we get paid from Covered CA. When you have the calculation and coverage summaries it’s so much easier to understand and for us to explain how the Affordable Care Act can help you and your family.
Please note that the Advance Premium Tax Credits (APTC) will all come out in the wash, when you file your taxes on form #1040. That’s when you actually file what you earned during the taxable year, not an estimate.
How to use our FREE Quote Engine, Subsidy Calculator and get the MOST from the experience.
When you get a FREE quote, you can also see the benefits, view actual brochures, MD and Hospital Lists all ONE easy process with no obligation & it can be anonymous. Enter your zip code, date of birth, family – household taxation relationships (MAGI – Definition), Estimated MAGI – Modified Adjusted Gross Income for the upcoming – current year. Last years tax return only gives an idea so that Covered CA can approve your advance tax credit to help pay premiums.
If you qualify for tax credits – subsidies and want them in advance (Pros-Cons) of filing your taxes click on “Health On Exchange” – Covered CA, illustrated below. Here’s a Quick Reference Federal Poverty Level Chart. This website and are individual consultation are provided to you FREE of Charge! We are paid by Covered CA and/or the Insurance Companies to help you. When you fill out the Covered CA ONLINE Application, just appoint us as your agent under Find Help in the Upper Right Hand Corner so that we get paid for helping you. Click here for screen shots for more detail of how to do it. If you prefer, you can pay us a consultation fee in lieu of appointing us as your agent, for educational services only.
You can then see all the quotes on the exchange, showing the Cost Share Reduction – Enhanced Silver if available, subsidy – tax credit amount and your net premium. If you click “Off Exchange” you will see more plans and companies like Assurant and CIGNA who are not participating in Covered CA and may have larger provider lists. Scroll down for more screen shots.
The quote engine shows you TONS of plans and variations. To narrow it down, click on the features and companies you are most interested in. If you qualify for Enhanced Silver, we urge you to take it. A 94% Silver is better than 90% Platinum!
Then click on “View Plan Details” – “View Doctor’s & Providers” – to compare and get more information. Please note that the quote engine does not show enhanced silver, but shows silver at 70%. Check our chart for the better silver coverage. To apply, click on apply now or use the links in the right hand column, ON THIS PAGE, but it will have you redo the quote for that specific company. The price is the SAME, no matter if you use us, go direct to Covered CA or the Insurance Company, as mandated by law! If applying through Covered CA, be sure to sign the form to appoint us as your agent. It’s not all the easy to figure out how to do it on their website.
If you have any questions email [email protected] or call us 310.519.1335
Resources and Tax Forms
IRS.Gov FAQ’s on Premium Tax Credit ♦ Publication 5120 Get it now or later ♦ Pub 2121 Facts about Premium Tax Credit ♦ Pub 5152 Report Income Changes as they happen ♦ Consumer Union Explanation for filing Taxes
- Affordable Health Coverage? 9.5% Employee ONLY
- Income Application Questions?
- IRS Summary
- Lawsuit over spending not authorized HR 3762
- Medi Cal – Income Drop? Tax or Subsidy Pay Back?
- Premium Subsidy Now or Tax Time?
- Subsidies in Federal Exchange Upheld – King v Burwell
- Tax Credit Calculation? CFR 1.36 B-3
- Technical Regulations
- Historical Info
- Income – FPL & Program Chart
- MAGI – Modified Adjusted Gross Income – Line 37
- MAGI – FAQs – What counts as Income?
- Capital Gains – Line 13
- Caregiver Income?
- Clergy – Housing Allowance?
- Foreign Income IRC §911
- Gift Income?
- Interest Income
- Life Insurance Proceeds
- Rental Income?
- Schedule C – Self-Employment Income
- SDI State Disability Benefits Taxable?
- Social Security Benefits are included in MAGI
- Student Loan Interest?
- Taxable & Non-Taxable Income?
- MAGI – FAQs – What counts as Income?
Four Things to Know about Advance Payments of the Premium Tax Credit
When you enroll in coverage through the Marketplace during Open Season, which runs through Jan. 31, 2016, you can choose to have monthly advance credit payments sent directly to your insurer. If you get the benefit of advance credit payments in any amount, or if you plan to claim the premium tax credit, you must file a federal income tax return and use a Form 8962, Premium Tax Credit (PTC) to reconcile the amount of advance credit payments made on your behalf with the amount of your actual premium tax credit. You must file an income tax return for this purpose even if you are otherwise not required to file a return.
Here are four things to know about advance payments of the premium tax credit:
- If the premium tax credit computed on your return is more than the advance credit payments made on your behalf during the year, the difference will increase your refund or lower the amount of tax you owe. This will be reported in the ‘Payments’ section of Form 1040.
- If the advance credit payments are more than the amount of the premium tax credit you are allowed, you will add all or a portion of the excess advance credit payments made on your behalf to your tax liability by entering it in the ‘Tax and Credits’ section of your tax return. This will result in either a smaller refund or a larger balance due.
- If advance credit payments are made on behalf of you or an individual in your family, and you do not file a tax return, you will not be eligible for advance credit payments or cost-sharing reductions to help pay for your Marketplace health insurance coverage in future years. • The amount of excess advance credit payments that you are required to repay may be limited based on your household income and filing status. If your household income is 400 percent or more of the applicable federal poverty line, you will have to repay all of the advance credit payments. The repayment limits are listed in the table below.
|Repayment Limitation Table|
|Household Income Percentage of Federal Poverty Line||Limitation Amount for Single||Limitation Amount for all other filing statuses|
|Less than 200%||$300||$600|
|At least 200%, but less than 300%||$750||$1,500|
|At least 300%, but less than 400%||$1,250||$2,500|
|400% or more||No limit||No limit|
How to Determine if You Can Claim the Premium Tax Credit
The premium tax credit is a credit for certain people who enroll, or whose family member enrolls, in a qualified health plan offered through a Marketplace. Claiming the premium tax credit may increase your refund or lower the amount of tax that you would otherwise owe.
If you did not get advance credit payments in 2015, you can claim the full benefit of the premium tax credit that you are allowed when you file your tax return. You must file Form 8962 to claim the PTC on your tax return.
You can take the PTC for 2015 if you meet all of these conditions.
For at least one month of the year, all of the following were true:
- An individual in your tax family was enrolled in a qualified health plan offered through the Marketplace.
- The individual was not eligible for minimum essential coverage, other than coverage in the individual market.
- The portion of the enrollment premiums for the month for which you are responsible was paid by the due date of your tax return.
To be an applicable taxpayer, you must meet all of the following requirements:
- For 2015, your household income is at least 100 percent but no more than 400 percent of the Federal poverty line for your family size.
- No one can claim you as a dependent on a tax return for 2015.
- If you were married at the end of 2015, you must generally file a joint return. However, filing a separate return from your spouse will not disqualify you from being an applicable taxpayer if you meet certain requirements.
Individuals can use the Premium Tax Credit Flow Chart to determine if they are eligible for the credit. Answer the yes-or-no questions in the chart – or via the accessible text – and follow the arrows to find out if you may be eligible for the premium tax credit. You can also use our interactive tool, Am I eligible to claim the Premium Tax Credit? to find out if you are eligible.
If you received the benefit of advance credit payments in 2015, you must file a tax return to reconcile the amount of advance credit payments made on your behalf with the amount of your actual premium tax credit. You must file an income tax return for this purpose even if you are otherwise not required to file a return. You’ll file Form 8962, Premium Tax Credit, with your tax return to reconcile the credit.
Remember, that filing electronically is the easiest way to file a complete and accurate tax return as the software does the math and guides you through the filing process. Electronic filing options include: free Volunteer Assistance, IRS Free File, commercial software, and professional assistance.