The Affordable Care Act is what Americans want...!
In the most basic sense, the law mandates that quality health care must be available to all Americans, regardless of income.
| One of the selling points of the Affordable Care Act was that it would be "affordable", but the question of affordability is a complicated. There is a lot of information circulating about the Affordable Care Act (ACA), and the more difficult to understand what the tax implications are...? Started in 2014 there were 2 important tax implications of the ACA:
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There are 2 options for claiming the credit.
- You can choose to take an advance payment of the advanced credit based on your estimated income and family size for the year. An equal portion of the estimated credit is paid directly to the insurance company each month during the tax year. When tax time comes around and you file your return, you must compare the prepaid credit against the actual credit allowed. If the there is a difference in the prepayments and the actual credit (i.e. if your income or family size is different than what you expected at the beginning of the year), you could be owed more premium tax credit, which would increase your refund. However, you could also be required to repay to the IRS the amount of any excess prepaid credit. In other words, if you do not use all of your credit, you may get more back when you file your tax return. Alternatively, if you take too much credit during the year to pay for your health insurance premiums, you may owe money back to the IRS when you file your tax return.
- You can also choose to pay your premiums out-of-pocket each month and collect the full credit when you file your taxes.
But not every one will have access to affordable health insurance. In states that haven’t expanded Medicaid — which includes Ohio and Indiana, individuals earning less than 100% of poverty will have no relief — as they aren’t eligible for tax credits or other subsidies.
The amount of credit available for prepayment is calculated by the new Health Insurance Marketplaces (also known as exchanges). To qualify for the credit, your income must meet certain guidelines. For some people, if their income is below a certain level, they may be eligible for coverage under their state's Medicaid program, which is free. These taxpayers would not be eligible for the tax credit. Taxpayers who are enrolled in an insurance plan through their employer would also not be eligible for the credit.
Because the prepayment of the credit is based on estimated income and family size as reported to the insurance marketplace, taxpayers should notify their state's marketplace if there is a change in household income or in family size that could affect the amount of their actual credit. Changes in family size can include the birth or adoption of a child, a child moving out of the household, parents moving into the household, marriage or divorce.
The Premium Tax Credit is not allowed if the taxpayer files using the Married Filing Separately status. Like the Child Tax Credit, the parent who claims a child's dependent exemption will include the child in the family household size when determining the amount of credit.
And also you should remember, if you don't have insurance after February 15, 2014, you may be assessed a tax penalty. The Shared Responsibility Provision allows a penalty assessment on certain taxpayers without insurance coverage and qualified employers who do not offer insurance. If you do not pay attention to the rules you could miss out on benefits or worse, owe a big payment back to the IRS in the future.
Small businesses benefit from the ACA through new tax credits that make health insurance more affordable.
Source: Huffington Post
