Qualify for Obamacare Tax Credit
Anyone without health insurance should be thinking about how to qualify for Obamacare tax credit. This could be your opportunity to finally get health insurance. If you do not purchase health insurance then you may have to pay a penalty. The penalty is calculated based on your income. Depending on your financial situation it may make sense to pay the penalty if the insurance rates are too high and you do not qualify for a tax credit.
Although they are called credits, the payments made under Obamacare are really a government-funded subsidy. You don’t need to owe any income taxes to receive the credit. And it’s paid directly to your health insurance company, not to you when you enroll in your health insurance plan. This means that you will not need to wait until your taxes have been filed and processed in to receive the credit; nor will you need to pay the full premium when you purchase health insurance and then wait to be reimbursed.
How much is the credit?
It depends on your household size and income. Those with the lowest incomes will receive the largest tax credits. You can get an idea of how big a credit you’ll qualify for by using the Kaiser Family Foundation Health Reform Subsidy Calculator. Plug in your age and income numbers and the calculator will give you an estimate of your subsidy. For example, a 40-year-old single person who earned $35,000 would qualify for annual credit of $532. A couple who have two children and $75,000 in annual income would get a $4,422 credit. The older you are, the larger your credit, because your health insurance costs are higher. For example, a single person age 60 with $35,000 in income would qualify for a $4,866 credit, far more than a 40-year-old single.
Don’t wait to get coverage
There is a lot of information and some of it misinformation surrounding Obamacare. Some people may wait until it is too late to get health insurance. Others, are scared because they hear that people’s financial information is being tampered with because of security risks. If you have a trusted financial advisor, tax professional or tax attorney please seek their advice as to enrollment, tax credits and deadlines. Also, be careful not to give your financial information to just anyone. You can educate yourself on your options by talking to professionals who are knowledge on Obamacare and its tax benefits.