How Do I Know If I Qualify for Tax Credits to Help Pay for Health Insurance?

By on December 4th, 2013

Thumbs up! You qualify.

The Short Answer

Your eligibility for tax credits to help pay for health insurance depends on your estimated “modified adjusted gross income (MAGI)” for 2014. If you live in a state that didn’t expand Medicaid, and if your income falls between 100% and 400% of the federal poverty level, you should be eligible for premium discounts. (If you’re in a state that expanded Medicaid, your income needs to be between 138% and 400% to qualify you for premium discounts.)

Sound like a lot of mumbo jumbo? Read on for an explanation. Or, if you don’t want the details and just want to know whether you qualify, try the GetInsured Estimator now.

The Longer Answer

Let’s define the terms

AGI. Your adjusted gross income — essentially all the money you earn minus certain tax deductions.

MAGI. Your modified adjusted gross income — your AGI plus any tax-exempt interest you earn. Tax-exempt interest comes from things like savings accounts, municipal bonds, and stocks. Basically, anything you earn interest on falls into this category. Often, your MAGI and AGI are one and the same.

FPL. The federal poverty level — a number determined by the government that sets the minimum amount of gross income a family needs for food, clothing, transportation, shelter, and other necessities. The FPL varies according to family size and gets adjusted every year for inflation.

If you make exactly the same amount as the FPL, your income is considered 100% of the FPL. If you make twice as much as the FPL, then your income is 200% of the FPL, and so on.

So, am I eligible for tax credits or not?

OK, now that we have the terms down, here’s what it all means to you.

If your income is above 400% of the FPL, you’re not entitled to any tax credits.

If your income is between 100% and 400% of the FPL, and you live in a state that didn’t expand Medicaid, you should qualify for tax credits.

If your income is between 138% and 400% of the FPL, and you live in a state that did expand Medicaid, you should qualify for tax credits.

Still confused? Here’s an easier way to find out

If you’re unsure about whether or not your income level qualifies you for tax credits, you can use an online estimator, like the one on GetInsured. Enter your household income, your household size, and your zip code, and our estimator will help you find out whether you qualify for tax credits, Medicaid, Medicare, or the Children’s Health Insurance Program (CHIP).

Try the GetInsured online estimator now.

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