Health care costs, as well as insurance premiums, are high, and this makes access to quality health services out of reach for many individuals. With constant changes in health care, the understanding and knowledge of such credits will benefit you greatly.
Some full-time workers are fortunate enough to qualify for a great health insurance plan through their employer. However, some employer-sponsored plans may not be effective for all of your needs, or your portion of the premium may be too expensive for your budget. Some people, such as contract workers and self-employed individuals, may only have access to individual policies and may be responsible for the full premium amount. Under current laws, you may qualify for a tax credit on your health insurance premium. However, there are eligibility requirements that you must meet in order to qualify for this credit.
Standard Income Requirements That Play a Factor
The income requirement is one of the most significant eligibility requirements that you must meet if you want to qualify for this tax benefit. To meet the income requirements, your gross annual income must fall in between the range of the full poverty line limit and up to 400 percent of the poverty line limit. Those whose income falls below this range, you may qualify in select circumstances. However, those who earn income above this limit will not qualify for a tax credit and must pay premium expenses in full on their own. Keep in mind that the income requirements regarding the premium credit relates to the number of individuals in the home. There are different requirements for income limits and ranges depending on whether you have one, two or four or more individuals residing the home.
Identifying Your Options When Filing Your Taxes
If you are a married taxpayer, how you file your personal income tax return can also play a role in your qualification for the credit. You cannot qualify if you file with the married filing separately status. However, there are some exceptions to this rule. For example, if you are a documented victim of domestic abuse or violence, the filing status requirement may be waived. In addition, if you have been legally separated from your spouse for more than six months, you may be able to file with an unmarried status if you pay dependent care housing expenses and earn more half of the expenses for your household during the tax year.
Other Eligibility Requirements That Are Reviewed
While these are the two most common and significant requirements that you must meet in order to qualify for the premium tax credit, keep in mind that there are a few other limiting requirements as well. For example, when you register online to receive the credit and to purchase a plan through the Healthcare.gov website, your physical address will be reviewed. Requirements may vary slightly based on specific geographic areas. In addition, the number of people in your household may also affect these requirements and your overall eligibility. A final factor that can affect your eligibility for the credit relates to the cost of available plans in your area. All factors will be analyzed when you apply for the credit online.
Can You Qualify for a Credit?
The best way to determine if you qualify for this financial credit is to apply online through the government’s established website. Remember that there are special enrollment periods that you must pay attention to if you want to use this credit. The primary enrollment period is around the rollover for the new year, but there are also windows when you may apply if some of your circumstances have changed during the year. For example, you may qualify during a special enrollment period if:
- You lost your job recently
- Your marital status has changed
- You have recently moved
These are some of the more common qualifications for special enrollment, but there are others to explore as well. If you qualify for the credit, you can elect to receive the credit on your tax return when you file at the end of the year. You can also elect to receive the credit over the course of the year with a direct reduction in your premium bills each month. This may help you to make the premium payments more affordable, and because of this, it is a preferred option for many who qualify for this credit.