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You are here: Home / How to estimate your annual income for Obamacare Subsidies

How to estimate your annual income for Obamacare Subsidies

This step in applying for ACA Health Insurance is critical, because

  1. It determines whether you get a subsidy, and
  2. 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

  • yourself,
  • 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

  1. Start with your household’s most recent “Adjusted Gross Income” (AGI, line 37, Form 1040)
  2. Add the following, if any:
  3. Untaxed Social Security
  4. Tax-exempt interest income
  5. 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.

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