This step in applying for ACA Health Insurance is critical, because
- It determines whether you get a subsidy, and
- if you get it wrong, your could face penalties in addition to having ot pay back the subsidies!
Here’s how to do it correctly:
Who to include
For the year for which you are applying, you will need to include the annual income for
- your spouse, and
- any tax dependents you’ll claim during the year for which you are applying.
For dependents, include their income if they are required to submit a tax return, even if they don’t need health coverage. (Note: do not include dependents who file even though they aren’t required to; like a child with summer job income below the tax filing threshold, who files taxes to get a refund.)
How to estimate?
How do you estimate your income for the year? If you haven’t changed jobs, or got a raise, lost a job, etc., assume things are roughly the same, and start with last year’s tax return
- Start with your household’s most recent “Adjusted Gross Income” (AGI, line 37, Form 1040)
- Add the following, if any:
- Untaxed Social Security
- Tax-exempt interest income
- Excluded foreign income
Now adjust for changes you expect in 2017 for you, your spouse, and all tax dependents whose income you must report.
Things to consider:
- Expected raises,
- reduced hours,
- new jobs,
- household changes (like a birth, death, marriage of someone in the household),
- other income types you expect but didn’t have in the previous year.