Next year, lots of people will get federal subsidies to help them pay for the health insurance they are being required to buy. Whether you get a tax subsidy to offset the cost of health insurance depends on your modified adjusted gross income. Since its tax time, you’re likely to have that information right at your fingertips.
If you have your 1040 handy, you can find your adjusted gross income on line 37. To get your modified adjusted gross income, just add any tax-exempt interest you may have earned. That should appear on line 8b of your 1040. That combination is equal to your modified adjusted gross income that’s used to see if you can get a tax credit to offset what you pay for health insurance.
Next, compare your modified adjusted gross income to the federal poverty line guidelines below, unless you live in Alaska or Hawaii. You can find those guidelines at http://coverageforall.org/pdf/FHCE_FedPovertyLevel.pdf. The table below will also work if you live in the District of Columbia.
2013 Federal Poverty Line Guidelines
In 2014, the amount you have to pay for health insurance for one year is not to exceed 9.5 percent of your modified adjusted gross income. That can be up to 400 percent of the federal poverty line and you’ll still qualify for some tax credit. Of course, that’s on a sliding scale. The lowest incomes qualify for the biggest credits. Family size counts, too, as the above guidelines show. Be sure to add $4,020 per person if your household includes more than eight people.
From agent to V.P. of Business Development, Fred Adams has filled most every role imaginable during 21 years working with health insurance. When Congress passed the 2003 law on health savings accounts, Fred was dubbed “The HSA Expert” by press and a growing, fanatical client base.