The Affordable Care Act and Your Taxes

Love it or hate it, the Affordable Care Act (aka “Obamacare”) will likely affect your taxes for 2014.

Through Obamacare the government offers a premium tax credit to help subsidize individual health care coverage. If you have insurance through the Health Insurance Marketplace (aka the Exchange) then your insurance company may already be receiving this subsidy on your behalf. (If you are paying the full monthly premium then you are not receiving this credit in advance.)

It’s important to report changes in your circumstances to the Exchange to help you avoid getting too much or too little advance payment of the premium tax credit. Getting too much means you may owe additional money or it may eat just eat into your tax refund. Getting too little could mean missing out on premium assistance to reduce your monthly premiums. (Worst case scenario: your income is too high to qualify for the credit, in which case every penny will have to be paid back come April 15.)

Having just passed the middle of the year, now is a great time to review your circumstances and see if there are any changes worth reporting. Such changes include:

A change in income,
A change in filing status (e.g. marriage),
Increase in family size (e.g. having a baby),
Getting health insurance through your employer,
Or even moving.

Changes in circumstances also may qualify you for a special enrollment period to change or get insurance through the Marketplace. In most cases, if you qualify for the special enrollment period you will have sixty days to enroll following the change in circumstances.

Changes can be made through the Washington-specific Exchange, found at www.wahealthplanfinder.org.

If you have any questions regarding the premium tax credit or how the Affordable Care Act may affect your tax situation, please feel free to email me, John Rosenbaum (john “at” thrivebusinessgroup.com), or check out www.HealthCare.gov.