The Connection between Health Care and Your Taxes.

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Minimum essential coverage

The Affordable Care Act mandates that everyone has to have health insurance coverage. Your income tax return can help in paying for that coverage. Who can acquire minimal essential healthcare coverage through one of the following venues:

• Health insurance through the Healthcare Marketplace
• Health insurance coverage through your employer
• A government-sponsored program such as Medicare or Medicaid
• A health insurance policy directly from an insurance company
• Coverage under a plan that is approved by the Department of Health and Human Services

Modified adjusted gross income

If you purchase a health plan through the Marketplace, you’ll need to estimate your household’s gross income. That is referred to as your modified adjusted gross income and includes all income from all sources, including your spouse, if filing married. This amount should reflect your income on your tax return. It determines your eligibility for lower-cost health insurance premiums. When filling out the Marketplace application, includes the following:

• Salaries and wages, including tips
• Social Security payments
• Net income from self-employment and business income
• Alimony payments
• Unemployment payments

Premium tax credit

Premium tax credits are available for those who acquire health insurance through the Marketplace. These credits assist with monthly premium payments and are determined by your tax return information.

Most people eligible for the premium tax credit are also suitable for the Advance Premium Tax Credit (also called Subsidy). This is a monthly reduction of your health insurance premiums. To qualify for the premium tax credit, you must:

• Buy your health insurance through the Marketplace
• Be ineligible for a plan offered by the government or your employer
• Not be claimed as a dependent by another person
• Be within certain income limits
• Not have filed as married filing separately, except under certain circumstances