Be careful how you file your income taxes to receive tax credits

You must file a joint income tax return for your household if you purchased a health insurance plan in the Marketplace, were eligible for tax credits, and want to use those tax credits.

February 17, 2014 - Author: ,

It is income tax filing season as well as the last couple of months to purchase health insurance in the Marketplace. Are they connected? Yes, if you are married. Married couples must file their income tax return for 2013 jointly with their spouse in order to get lower-cost Marketplace coverage based on their 2013 income. The Marketplace enrollment for 2014 coverage continues until March 31, 2014 and 2013 income taxes are due to be filed by April 15.

When you apply for Marketplace coverage, you will be asked for household and income information.  A household, for purposes of determining eligibility for premium tax credits, includes any individuals for whom a taxpayer claims a personal exemption on the federal tax form. That includes yourself, your spouse and dependents. To learn about who qualifies as a dependent, refer to IRS Publication 501. Visit the IRS website for the IRS information on tax credits.

Tax credits will help lower- and middle-income families by cutting the cost of health insurance. Household income must be between 100 and 400 percent of the federal poverty level. Tax credits are only available if a health insurance plan is purchased in the Marketplace, 1-800-318-2596 or You cannot be eligible for other qualifying health coverage, such as Medicare, Medicaid or affordable employer-sponsored coverage. If you qualify, the Health Premium Tax Credit will reduce the total amount of tax you owe the IRS. You can get the tax credit to help cut the cost of your health insurance. If you do not owe, you can get a bigger refund.

Married couples have the choice of filing their income taxes jointly or separately. Again, to be eligible for premium tax credits for your health insurance plan purchased through the Marketplace, married couples must decide to file joint income taxes in 2013.

To learn more about the two options for taking the tax credit, see my article titled New tax credits cut the cost of health insurance.

Michigan State University Extension is providing education about health insurance basics this winter, including the why, what and how for making a smart decision. Find out about Smart Choice: Health Insurance workshops and factual information at the Affordable Care Act Roadmap. For more answers to your questions about health insurance, visit Q&A or the Health Insurance FAQs - eXtension

Tags: caregiving, chronic disease, family, food & health, government, money management, msu extension, public policy

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