Premium Tax Credit and Open Enrollment Open enrollment begins this Saturday, November 15th and runs through February 15, 2015. During this time frame, its possible to apply for health insurance through the federal or state health insurance exchange for coverage for the year 2015. Before you apply for health insurance, though, you might want to sort through some tax issues. First tax issue: Are you exempt from the health insurance mandate? Are you required to obtain health insurance? Most individuals are required to have health insurance or pay a penalty. But did you know there are 12 exemptions from the penalty? Notably, Americans living abroad and conscientious objectors are among the groups of people exempt from the mandate. Some exemptions require mailing an application to the health insurance exchange. If that applies to you, then make sure to apply for your exemption and get that processed before you file your tax return. Second issue: who will be your dependents in 2015? Youre responsible for making sure that all your dependents have health insurance for the year. Suppose youre claiming the dependents next year, and the other parent is supposed to cover the kids on their insurance. In this situation, make sure the kids are covered. Get proof of insurance. The IRS will hold the person who claims the dependents responsible for the health insurance, so youll need this documentation to avoid the health insurance penalty. Third issue: do you qualify for premium assistance? The federal government has a program for paying part of your health insurance premiums. Its called the premium assistance tax credit. The really unusual thing about this tax credit: the IRS can pay out this credit in advance by sending money directly to the insurance company. In turn, this reduces how much youll have to pay out of pocket for health insurance premiums each month. Theres five eligibility criteria. One of them is that you purchase insurance through an exchange. Fourth issue: how much is the premium tax credit? How much premium assistance the IRS will pay out depends on several factors, including the cost of health insurance in your area and your household income.
Posted on: Tue, 11 Nov 2014 17:33:26 +0000
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