Obama Care


N

news

My wife (age 61) only work, because her employer provides $$ health
care as an employee benefit. I (age 63) am unemployed/ retired.

I recently heard that the Affordable Care Subsidies are based SOLELY
upon EARNED income. If my wife might retire, we would have NO earned
income. We do have substantial dividend/ interest income.

Without any Earned Iincome, would we qualify for low cost, subsidized
health insurance?
 
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S

scott s.

My wife (age 61) only work, because her employer provides $$ health
care as an employee benefit. I (age 63) am unemployed/ retired.

I recently heard that the Affordable Care Subsidies are based SOLELY
upon EARNED income. If my wife might retire, we would have NO earned
income. We do have substantial dividend/ interest income.

Without any Earned Iincome, would we qualify for low cost, subsidized
health insurance?
Not a tax professional, but I think what you heard is wrong.

The "premium tax credit" which I think you are referring to, is
computed based on something called "household income". Household
income is based on the total of something called "modified AGI"
income of all persons who are claimed as personal exemptions on
taxpayer's 1040 (IIUC married persons must file jointly to claim
credit).

"Modified AGI" is the AGI computed on form 1040 INCREASED by certain
amounts that aren't otherwise taxed, such as tax exempt interest
and social security income not subject to tax. So I think Modified
AGI will always be at least as much as your "normal" AGI.

Also IIUC this "modified AGI" has nothing to do with the "modified
AGI" computed for purposes of determining liabiity for AMT.

If a pro could confirm or correct this, please do!

scott s.
...
 
R

Retired

Not a tax professional, but I think what you heard is wrong.

The "premium tax credit" which I think you are referring to, is
computed based on something called "household income". Household
income is based on the total of something called "modified AGI"
income of all persons who are claimed as personal exemptions on
taxpayer's 1040 (IIUC married persons must file jointly to claim
credit).

"Modified AGI" is the AGI computed on form 1040 INCREASED by certain
amounts that aren't otherwise taxed, such as tax exempt interest
and social security income not subject to tax. So I think Modified
AGI will always be at least as much as your "normal" AGI.

Also IIUC this "modified AGI" has nothing to do with the "modified
AGI" computed for purposes of determining liabiity for AMT.

If a pro could confirm or correct this, please do!

scott s.
..
MAGI for ACA/Obamacare is explained here:

https://www.healthcare.gov/what-income-and-household-information-do-i-provide-when-i-apply-for-marketplace-coverage/

or http://tinyurl.com/lkgl3dq

Quote:

"Estimating your income

When you apply for lower costs in the Marketplace, you’ll need to
estimate your income for 2014.

You can start by adding up the following items for:

You and your spouse, if you are married and will file a joint tax
return
Any dependents who make enough money to be required to file a tax
return

For each of the following sources, estimate what your income will be
in 2014:

Wages
Salaries
Tips
Net income from any self-employment or business (generally the
amount of money you take in from your business minus your business
expenses)
Unemployment compensation
Social Security payments, including disability payments--but not
Supplemental Security Income (SSI)
Alimony

Other items to include when estimating your 2014 income are:
retirement income, investment income, pension income, rental income,
and other taxable income such as prizes, awards, and gambling winnings.

DON’T include the following:

Child support
Gifts
Supplemental Security Income (SSI)
Veterans’ disability payments
Workers’ compensation
Proceeds from loans (like student loans, home equity loans, or
bank loans)

For more information on reporting your income, see IRS Publication 525.


Modified adjusted gross income and household income

When you fill out the Marketplace application, your estimated
household income will be calculated using the information you provide.
Your household income determines your eligibility for lower costs on
Marketplace coverage.

Your household income is your modified adjusted gross income (MAGI)
(joint MAGI if you’re married), plus the MAGI of your dependents who
make enough money to have to file a tax return.

MAGI is generally your adjusted gross income plus any tax-exempt
Social Security benefits (except for Supplemental Security Income
(SSI), which is not counted), tax-exempt interest, and tax-exempt
foreign income."
 
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