Q&A Topics

Friday, August 12, 2011 9:25:38 AM

What is the tax credit I can get under the new health insurance law?

Generally, the tax credit will be available to individuals and families with income between 100 percent and 400 percent of the federal poverty level ($22,350 to $89,400 for a family of four in 2011). To be eligible for the tax credit, you must be enrolled in a "qualified" health insurance plan through one of the insurance marketplaces known formally as "exchanges." Furthermore, anyone covered through an insurance marketplace can't be eligible for Medicare, Medicaid or an "affordable" employer-sponsored health plan.

For moderate-income families who don't have enough cash to pay a full health insurance premium upfront, an advance payment of the tax credit will be made by the Treasury Department to the health insurance company. Later, the advance payment will be reconciled against the amount of the family’s actual tax credit, as calculated on the family’s federal income tax return.

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