Q & A
How is income divided in the calculation of subsidies on the insurance exchanges?
Full Question: My wife will be exploring insurance options on the federal exchange in November. In regard to subsidies, we file jointly and most of our income comes from dividends derived from jointly owned assets. I am assuming that her share of that income would be precisely half of the annual total income (in addition to her earned income from part-time work.) Is this a fair assumption?
Answer: No, it’s not. Premium tax credits are available on the health insurance marketplace to people with incomes between 100 and 400 percent of the federal poverty level (in November that will be $15,730 to $62,920 for a couple). Eligibility is based on household income, not her income alone.
If the modified adjusted gross income (MAGI) for the two of you falls within those limits, she could be eligible for a subsidy. Under the health law, MAGI would include your wife’s wages and your dividend income, as well as tax-exempt Social Security benefits, tax-exempt interest and tax-exempt foreign income, says Mark Luscombe, a federal tax analyst at Wolters Kluwer’s CCH, a tax and accounting information publisher.
Source: Michelle Andrews, Seattle/LocalHealthGuide - 8/12/2014
This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.