What is the Definition of a Tax Household for Health Insurance?

May 9, 2014 — Leave a comment

Under the Affordable Care Act (ACA), eligibility for a premium tax credit (also called a subsidy) is based on the income earned by members of your household.

Click here to access a chart showing income levels for subsidy eligibility.

Who Counts as Part of Your Tax Household?Tax Household

In general your tax household includes anyone for whom you claim a personal exemption on your federal tax return:

  • Yourself
  • Your spouse
  • Your dependents, including:
    • Children who live with you for more than half the year
    • Children under age 19 at the end of the year (24 if a full-time student), even if the child is away from home for education, illness, business, vacation, or military service
    • Anyone else included on your tax return as a dependent, even if they don’t live with you

Who is NOT Considered Part of Your Tax Household?

  • Anyone who is NOT your dependent including:
    • Your unmarried partner
    • Children of your unmarried partner
    • Your parents who live with you, but file their own tax return
    • Other relatives who file their own tax return

Your Tax Household Can Change

The size and makeup of your household can change during the year due to changes in your family such as birth or adoption of a child, a child moving out of the home, divorce, legal separation, death, etc.

At any time your household changes, your eligibility for a premium subsidy (tax credit) may change as well.

If you purchased your health insurance through your state’s exchange (federal marketplace for Virginia residents), you must notify the Exchange about the change.

Certain family changes trigger a special enrollment period during which you may be eligible to change plans outside the regular Open Enrollment period.

Complex Households

Sometimes a complex family situation can make it difficult to figure out whether or not you qualify for a health insurance subsidy.  If you’re not sure, give our office a call.

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