That depends on what your actual annual income turns out to be. If your income goes over 400% FPL you will have to repay the full advance premium tax credit amount you received. If your actual annual modified adjusted gross income is higher than what you projected but less than 400% FPL, there are repayment limits based on income. On your tax return, you will compare the actual amount of advance premium tax credit you received during the year to the amount you should have received based on your modified adjusted gross income, and then pay back the excess up to the repayment limit.
It’s common for income to fluctuate, particularly if you are self-employed, perform seasonal work or have multiple jobs. To achieve the most accurate premium tax credit amount, you should report income changes to the health insurance Marketplace during the year, as they happen. Otherwise, if you claim a premium tax credit during the year based on estimated income and your actual income for the year edges over 400% FPL, you will need to pay back the full credit amount. To avoid this result, if you estimate your annual income will be close to 400% FPL, you could also consider waiting until you file your taxes to take all or a portion of the premium tax credit on your tax return instead of receiving advance payments.
When you apply for the premium tax credit, you will be asked to estimate your expected income for the upcoming year. Often a good place to start is to consider what your income is this year, or what income you reported on your tax return last year. However, if your circumstances have changed since then, for example, if you recently lost your job, you should make your best estimate of what your income will be next year. The health insurance Marketplace will compare your income estimates against records at the Internal Revenue Service, Social Security Administration and other sources. If your estimate and official records don’t match, or aren’t sufficiently close, but you meet all other eligibility requirements, you might be asked to provide documentation to support your income projections.
In general, if the income amount shown on that official record is more than 25% or $6,000 (whichever is greater) higher than the amount you put on your application, you might receive a data match inconsistency notice from the Marketplace and you’ll need to provide more documentation.
If you don’t have that documentation handy, the Marketplace will provide subsidies for up to 90 days while you gather and submit your documentation for verification. It is very important that you provide any documentation requested by the Marketplace in a timely manner; if you don’t your subsidies might be reduced or terminated.
Keep in mind that if you estimate your income incorrectly and end up claiming more help than you are eligible for, you may have to pay back some or all of the premium tax credit you received. If you over-estimate your income and end up claiming less help than you are entitled to, the difference will be refunded to you when you file your income taxes the following year.
Yes, you will be considered as a household of two for both Medicaid and premium tax credits. However, your grandchild will be considered as her own household for Medicaid and CHIP and your income will not count in determining her eligibility for these programs. Assuming she does not have her own income she will likely be eligible for Medicaid or CHIP and not eligible for premium tax credits for coverage in the Marketplace. You could of course purchase coverage for her in the Marketplace but you would not be eligible for a premium tax credit to help pay for her plan. Whether you could include her on your policy would depend on what insurers offer in your Marketplace.
A household, for purposes of determining eligibility for premium tax credits, includes any individuals whom you list on the federal tax form. That includes yourself, your spouse, and dependents. Dependents include children who meet certain requirements:
U.S. citizen or resident of the U.S, Mexico or Canada
Live with you for more than half the year
Under age 19 at the end of the year (or under age 24 if a full-time student); a child is considered to live with the taxpayer while he or she is temporarily away from home due to education, illness, business, vacation or military service.
Doesn’t provide more than 50% of his or her own support
Other adults who can count as dependents include relatives, in-laws or full-time members of your household who:
Are a U.S. citizen or resident of the U.S, Mexico or Canada
Receive more than 50% of their support from you
Are related to you or live in your home all year
Make less than $4,150 (in 2018), generally excluding Social Security
A household can include individuals even if they are ineligible for tax credits (for example, individuals who are not lawfully present). Your household size can change during a year due to family changes, including the birth or adoption of a child, a child moving out of the house, and divorce or legal separation. When such changes take place you should report them to the Marketplace as they may affect your eligibility for subsidies. Family changes also can trigger a special enrollment opportunity when you can change health plans, even outside of the regular Open Enrollment period.
Note that the definition of household for determining eligibility for premium tax credits sometimes differs from the definition of household for determining Medicaid eligibility. Ask your Marketplace for more information about who should be counted in your household.
The answer depends on whether she earned enough income to be required to file a federal income tax return on her own. Generally, kids who qualify as tax dependents aren’t required to file a federal income tax return or pay taxes on their income if they earned less than a threshold amount ($12,000 in 2018.) If your daughter earned less than that, you would not count her income as part of your household income.
Scholarship and fellowship payments for tuition and fees and course-related expenses required of all students are not counted as income in determining your eligibility. Payments for room and board are included.
For divorces after December 31, 2018, alimony payments are no longer deductible for the paying spouse and alimony is not included as income for the recipient spouse.
For pre-2019 divorces, old tax rules apply. The paying spouse can deduct alimony payments from income and the recipient spouse must report alimony payments as income on the federal tax return. However, divorced couples have the option of modifying their pre-2019 divorce agreement to adopt the new tax rules.
