by Lauren Mandel
We’ve looked at Obamacare tax credit eligibility in the past, noting that anyone making between 100 and 400 percent of the federal poverty level (FPL) could qualify for tax credits to lower the cost of their monthly premiums. Last year, 84 percent of enrollees took advantage of these cost-savings.
As with many health insurance topics, calculating your tax credit estimate can be confusing. We thought it might be helpful to see a real-life example of an individual who is eligible for a tax credit and what you can do to calculate your own tax credit potential.
Name: Julia Frank
Marital Status: Single
Annual household income: $23,540
Under the Affordable Care Act, all Americans are expected to contribute a specific dollar amount to their health insurance. Julia’s expected contribution is 6.3 percent of her annual household income, which would be approximately $1,483.
The benchmark – or second cheapest – Silver plan available in a specific area helps estimate tax credits. The benchmark Silver plan in Julia’s neighborhood would cost her $360 per month in premiums, which is $4,320 a year.
The difference between Julia’s expected premium costs ($4,320) and her expected health insurance contribution ($1,483) is $2,837.
This difference – $2,837 – would be the total tax credit Julia would receive for the year. This comes out to $236.42 per month to help Julia afford her premiums, leaving her to pay only the difference of $123.58 each month.
Take a look at the chart below to calculate your own expected contribution, which can then help you estimate your tax credit for this year.
Is your household size bigger than just one person? Take a look at this next chart to see if you might qualify for tax credits depending on the size of your family.
Once you’re ready to enroll, you can receive your official tax credit estimate and apply it directly to the plan of your choice at GoHealthInsurance.com.