Premium Tax Credit Question

Sep 30, 2015

  1. vasilak
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    vasilak New Member

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    healtcare. gov question. i cover me and my son thorough my employer and i purchase coverage for my fiance third party. so we have a household of 3 on 50k income a year and pay a total of 800/mo in premiums for all three. It says on healthcare.gov that based on this info we are eligible for a subsidy bringing total down to around 400/month due to so called premium tax credit(subsidy). no one really knows the answer to this question, including my tax person: if I do NOT apply for this subsidy through the healtcare.org to lower my MONTHLY premiums will i be able to collect this premium tax credit at the end of the year when i do my taxes and is the premium tax credit DIFFERENT than income tax credit. In other words am i going to get extra assistance from the gov't to pay for health costs on top of income tax credit or premium tax credit is part of income tax credit. (i.e for income tax credit at the end of the year the irs credits 1500 per dependantx3= 4500 so does the premium tax credit come out of 4500?) thanks
     
    vasilak, Sep 30, 2015
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  2. taterpeeler
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    taterpeeler Guru

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    I am not a tax advisor AND I also nor should anyone else on here answer your question since we are agents getting paid to provide our advice

    There are several moving parts to your question and I do advise calling a broker in the state you live to do the enrollment....

    Thanks you and have a nice day

    BTW... I do know the answer to your question
     
  3. AllenChicago
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    AllenChicago Guru

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    My advice to everyone is, if you can afford it, don't use the Advance Premium Tax Credit when choosing an exchange plan. Avoid potential adjustment surprises, suspensions, headaches. You'll be able to claim an exact Premium Tax Credit amount when filing your 2015 income taxes.

    Unfortunately, less than 1% follow that advice though. ;)
     
  4. Tkruger
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    Tkruger Guru

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    What tater said. Too many moving parts and you're going to get yourself in a IRS pickle...
     
    Tkruger, Sep 30, 2015
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  5. G.Gordon
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    G.Gordon Guru

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    It is a basic question, yes, he should consult a broker in his area.

    A. You and your child are on employer coverage, you are in NO way eligible for the APTC.
    B. You are not married, your fiancé can apply "on exchange" and have the APTC applied to her monthly premiums or pick it up at the end of the year. If the insurance she currently has was bought outside the marketplace (not on H.gov, for example) then she is SOL for picking up the APTC all.

    You have two taxable households, you and your son and then your fiancé as a separate filer.
     
    G.Gordon, Sep 30, 2015
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  6. Ann H
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    Ann H Guru

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    1. Your household size is dependent upon who is claimed on your tax return. Therefore your household size is 2. Your fiance's household size is 1.

    2. If you apply for coverage ON exchange, you can apply for the subsidy, but choose not to take an ADVANCE of that subsidy. Therefore, any tax credit (subsidy) that you should have received can be claimed when you file your Federal Form 1040 taxes.

    3. You cannot apply for new coverage mid-year unless you have a Qualifying Event (like you lost coverage recently, got married, had a baby, etc.). However, open enrollment is coming November 1st, which is shopping time for a 2016 policy, and you could apply for new coverage then.

    4. If you are eligible for your employer's plan, you are not eligible for a subsidy unless the coverage is either unaffordable or inadequate. There are specific rules for calculating the "unaffordable and inadequate" levels, so contact a broker or tax consultant.

    5. Your last question is complex. You asked, "...is the premium tax credit DIFFERENT than income tax credit. In other words am i going to get extra assistance from the gov't to pay for health costs on top of income tax credit or premium tax credit is part of income tax credit. (i.e for income tax credit at the end of the year the irs credits 1500 per dependantx3= 4500 so does the premium tax credit come out of 4500?)" Your premium tax credit is different than other credits with the exception of the health insurance premium deduction that you get if you are self-employed. In that case, there is a complicated formula to determine the amount of your premium credit. In other cases, though, the premium tax credit is separate. I think your question about "income tax credit" is really about the earned income tax credit, and, yes, these are separate.

    6. Get a broker in your state. It will save you a lot of time and frustration.
     
    Ann H, Oct 1, 2015
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  7. BeeSelective
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    BeeSelective Guru

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    On healthcare. Gov, I'd search "what if I have employer provided health insurance".

    Do I qualify for a subsidy? The 9.5% rule only applies to the employee, not other family members.
     
  8. Ann H
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    Ann H Guru

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    If the employee's insurance through a group plan is affordable (using the 9.5% rule), then none of the family members can get a subsidy. It doesn't matter how much it costs to add dependents. Google "family glitch", and you will get a complete explanation about this issue.
     
    Ann H, Oct 1, 2015
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  9. vasilak
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    vasilak New Member

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    my employer will only catastrophic insurance next year with 6000 deductible which is crazy

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    i will be claiming me my son and my fiance we all live in the same house
     
    vasilak, Oct 2, 2015
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  10. AllenChicago
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    AllenChicago Guru

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    What maximum $$ out-of-pocket would you like, and how much are you willing to pay per month for that plan?
     
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