ObamaCare is here to stay. Whether you like it or not, it is the reality for families living in the United States.
As you may have heard, on June 25, 2015, the Supreme Court upheld the legislation, further cementing the law.
Pundits routinely tout the availability of ObamaCare tax credits. In short, those who qualify for such credits can have a portion of their health insurance premiums subsidized, thus reducing the burden placed on the family’s budget.
In this post, we will discuss how to obtain an ObamaCare tax credit. We’ll also share tips for avoiding costly mistakes when doing so.
Where You Buy Your Insurance Matters
To qualify for the tax credit, it’s important that you first obtain coverage that complies with the law. Most people have opted to purchase via the marketplace, HealthCare.gov. You can also go to an agent who can help you with that, or you can get on the phone and call the marketplace hotline.
Keep Good Records
It’s important that people keep all documentation. There is a form (1095A) that you need if you’ve received these credits. If you don’t have this form, then you can’t file your taxes.
We’ve actually had clients who are trying to file their taxes for the year-ended 2014. They have been trying to obtain this form, and they have been having difficulty.
Advanced Premium Tax Credit
At your election, you can obtain an advanced premium tax credit. You do this by estimating what your income will be (based on guidelines and the number of people in your household). This will yield a credit that will reduce your monthly health insurance premium.
At the end of the year, this all must be reconciled when you file your taxes. If your income varies from the estimate you provided, it is very important that you notify the marketplace and let them know that you have had a different income than expected. The credit must be adjusted, otherwise you may end up owing the credit back to the government at the end of the year.
Family’s Total Income
In addition, it’s important to understand that this credit is based on total family income (not just mom and dad, but actually all children too). In addition to taxable income, this also includes any social security benefits that you or your children may have received. There are some additional income items to consider, but social security benefits are the most commonly overlooked factor.
Everyone who receives the advanced premium tax credit must file a tax return and also must reconcile these credits on their tax returns.
Get Help Today
Need help obtaining an ObamaCare tax credit? Contact the Baker team today, and schedule a risk-free consultation. Our team has been serving the greater Evansville, Indiana area for over three decades. Our offices in Newburgh, Boonville, and surrounding communities are conveniently located.
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