Why Should You Choose Premium Tax Credit?
In the 2014 tax year, the premium tax credit (PTC) started working effectively under Affordable Care Act tax provisions. PTC is other form know as a refundable tax credit. Internal Revenue Service (IRS) pays to some qualifying household that has secured healthcare insurance through a healthcare exchange in this credit system. You can pay the advance amount straight to the healthcare insurance company to reimburse the monthly health insurance premium price. You need to know more about its eligibility criteria and the operating system.
Eligibility Criteria for the premium tax credit
The followings are some eligibility criteria for the premium tax credit.
- Family size
Your family size must fall within the category of the Marketplace. The coverage must emerge across the Marketplace.
Your household income should fall within a specific range to be eligible.
- Marital status
If you are in a marriage relation, you and your life partner must file a joint tax return.
You cannot be affirmed your coverage as a dependent by a different person.
- Government plans
You cannot be qualifying for insurance by a government health insurance plan.
What should be your eligible income range to avail PTC?
Once you get to know the eligibility criteria, then you need to look for the procedure how to avail PTC. The premium tax credit set up the federal poverty line as eligibility criteria to define a person’s annual income. This credit applies to those families whose annual income ranges fall in 100 percent to 400 percent of the federal poverty level (FPL). In this credit system, even if your annual income specifies eligibility, you must reach the other eligibility criteria as well.
Term and Conditions: You should know about
Some of the essential terms are mentioned below; you can go through this.
- It would be best if you take care of listing your dependents through your name and individual taxpayer identification number (ITIN) or SSN on your tax return, as it should be the same as affirming them as a dependent.
- Household annual income does not cover the modified AGI of those persons whom you consider as dependents. Those who are classifying a 2019 return are only to claim a payback of reserve estimated tax.
- In case a person in your tax family is not registered in a health plan but is qualifying for MEC, the person cannot be included as your coverage family. Your PTC is accessible to assist you to pay only for the insurance of the persons included in your coverage family.
- On the first day of the month, your tax family’s person must be registered in an eligible health plan.
- If you are not paying your enrollment premiums to share, the issuer may stop your coverage. Also, you cannot access that month’s credit amount. There might a chance of lapse of your coverage.
Now you know the eligibility and process to avail of the premium tax credits. If you find yourself in the eligibility criteria, you can benefit from this credit system. It may support you to manage your livelihood.