Eligibility for the Refundable Health Related Tax Credit Tightened
Code ˜36B currently provides a premium assistance credit for eligible individuals and families who buy health insurance through an exchange. The credit, which applies to tax years ending after December 31, 2013, is refundable and subsidizes the purchase of certain health insurance plans through an exchange.
The credit is available to individuals who file single or married filing joint with household incomes between 100% and 400% of the federal poverty level and who do not receive health insurance through an employer or a spouse employer.
For purposes of the credit, household income is defined as the sum of: (1) the taxpayer's modified adjusted gross income (MAGI), plus (2) the aggregate MAGI of all other individuals taken into account in determining that taxpayer's family size (but only if those individuals must file a tax return for the tax year). Under existing law, MAGI is defined as adjusted gross income increased by: (1) any amount excluded by Code 911 (exclusion from gross income for citizens or residents living abroad), plus (2) any tax exempt interest received or accrued during the tax year.
The 3% Withholding Repeal and Job Creation Act signed into law by President Obama on November 21, 2011 revises the definition of MAGI to include the amount of the taxpayers Social Security benefits that are otherwise excluded from gross income. As a result, MAGI is now defined as adjusted gross income plus: (1) any amount excluded by Code Sec. 911 (exclusion from gross income for citizens or residents living abroad); (2) any tax exempt interest received or accrued during the tax year; and (3) the
amount of Social Security benefits of the taxpayer that is excluded from gross income under Code 86. Call 888-753-2521or email firstname.lastname@example.org for more information.