On February 25, the IRS released Health Care Tax Tip 2014-03 reminding taxpayers that time is running out – only 4 days left – to enroll for health insurance coverage through the Health Insurance Marketplace.
However, the premium tax credit can help make purchasing health insurance coverage more affordable for people with moderate incomes. To be eligible for the premium tax credit, a tax filer must satisfy three rules:
1. Sign up for health insurance coverage through the Health Insurance Marketplace. The open enrollment period to purchase health insurance coverage for 2014 through the Health Insurance Marketplace ENDS in 4 days on March 31, 2014!
2. Household income between one and four times the federal poverty line. For a family of four for tax year 2014, that means income from $23,550 to $94,200.
3. Not eligible for other medical coverage, such as Medicare, Medicaid, or sufficiently generous employer-sponsored coverage.
If a Marketplace determines the taxpayer is likely to qualify for the tax credit at the time of signup on the Health Insurance Marketplace, then the taxpayer has two choices:
1. Choose to have some or all of the estimated credit paid in advance directly to the medical insurance company to lower the pay out-of-pocket for the monthly premiums during 2014, or
2. Wait to receive the premium tax credit when the 2014 tax return is filed in 2015. Waiting to receive the premium tax credit will either increase the tax refund or lower the balance due to the IRS.
For taxpayers choosing to receive the premium tax credit in advance, changes to income or family size will affect the credit eligible to receive. If the credit on the 2014 tax return (filed in 2015) does not match the amount received in advance, the taxpayer will have to repay any excess advance payment, or you may get a larger refund if you are entitled to more. It is important to tell your Marketplace about changes in your income or family size as they happen during 2014 because these changes will affect the amount of your credit.
Anyone interested can try Tax Facts on Individuals & Small Business, risk-free for 30 days, with a 100% guarantee of complete satisfaction. For more information, please go to www.nationalunderwriter.com/TaxFactsIndividuals or call 1-800-543-0874.