Health insurance tax credits and subsidies are a great way for those who qualify to get help with their insurance costs. These credits and subsidies can provide financial assistance for individuals and families who need help paying for health insurance premiums. But how does it work? What are the income limits to qualify, and do you have to pay it back? Let’s take a closer look at what these tax credits or subsidies are and how they can benefit you.
What is a Health Insurance Tax Credit or Subsidy?
Act (ACA) Marketplace and is based on your household size and income. Depending on your individual circumstances, you may be eligible for this credit when you buy health insurance through the marketplace—and in some cases, you may even qualify for free coverage if your household income falls within a certain range. What are the income limits to qualify for a tax credit?
To qualify for a health insurance tax credit or subsidy, your household income must generally fall between 100-400% of the federal poverty line (FPL). For example, if you’re an individual making up to $48,560 per year—or if you’re part of a family of four earning up to $100,400 per year—you may be eligible for a subsidy or tax credit. The exact amount of your subsidy depends on where in that range your income falls; those closer to 400% FPL will receive smaller subsidies than those closer to 100%.
Do You Have To Pay It Back?
No—you don’t have to pay back any of the money that comes from this subsidy or tax credit. However, when it comes time to file taxes you may have to reconcile your tax credit with the amount filed on your tax return. If the amount you actually made is higher than what you estimated on your application when you received your tax credit then you may owe additional taxes when you file. It is important that you report any changes in your income accurately throughout the year so that you don’t end up with an unexpected bill come tax time!
Health insurance tax credits and subsidies provide an important source of financial assistance for many people looking for help with their health care costs. By understanding how these credits work and what the income limits are, you can make sure that you make the most out of yours so that your premiums stay affordable all year round! If you think that you might be eligible for one of these credits or subsidies, be sure to contact an experienced health care professional today who can help walk you through the process step by step.
For more information on how to pick the right marketplace health insurance plan see: Navigating Marketplace Health Insurance: 5 Tips For Picking The Right Individual Health Plan