It is a good sign that your income is higher than you anticipated.
If you get your private health insurance through the public marketplace, that extra cash could mean an unexpected tax bill. A mid year income check can help.
If you receive premium subsidies through the marketplace, you may not be entitled to as much aid as you thought. At tax time, any overage needs to be paid back.
Workers could see an average raise of 4.1% in the next five years.
The director for tax policy and advocacy with the American Institute of CPAs said that you should go into your account and change your estimate.
You might get bigger monthly subsidies if you report a drop in income. Marriage or a new member of your household can affect the size of the aid, so make sure your account reflects that.
Cynthia Cox is a vice president at the Kaiser Family Foundation and the director of theAffordable Care Act program.
If you want to change your information, you can either call the exchange or go to your online account. If you used an insurance agent or broker to sign up, you should be able to get assistance from them as well.
Almost all of the people who enroll in private health insurance through the public marketplace are getting subsidies. People who get coverage through healthcare.gov or their state's exchange are those who can't get workplace insurance or aren't eligible for Medicaid or Medicare.
Subsidies were expanded due to the American Rescue Plan Act of 2011. Senate Democrats are trying to get the current expansion extended for another two years.
It’s still important to report an income change to avoid any kind of surprise, but hopefully the worst kinds of surprises won’t happen as much this year.
Prior to the temporary expansion, the aid was available to households with income up to 400% of the poverty level.
The amount that anyone pays in premiums is currently limited to 8.5% of their income, because the cap on income was eliminated for the next two years.
When the income cap was in place, people would have to account for all of their subsidies on their tax return if they estimated their income to be more than 400% of poverty.
Cox hopes that the worst kinds of surprises won't happen as much this year.
When you start getting tax forms early in 2023, one of them will be a Form 1095-A from the insurance marketplace, which details how much you received each month in tax credits
Form 8962 shows whether or not you received the correct amount of subsidies, as well as what the excess or shortfall is.
If you weren't eligible for any amount, you would have to pay more taxes. If you receive more than you are entitled to, the difference will either increase or decrease your tax bill.
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