Texas has 2.5 million residents (more than any other state) who are eligible for tax credits to reduce the cost of buying health insurance for new exchanges. These findings were unveiled in a study released Tuesday, November 12th, 2013 by the Kaiser Family Foundation. 25% of Texans are currently uninsured and the new tax credits are intended to provide financial assistance to those who need it most. Texans in certain income brackets can apply for credits or subsidies to help offset the cost of plans purchased through the health care exchange.
Millions of Americans Will Qualify
The report estimates that 17 million Americans qualify for the credits. It has been spotlighted that eligibility for these tax credits will be based primarily on income.
Those qualifying must earn between 100 and 400% of the federal poverty level (between $23,550 and $94,200 annually for a family of four). Qualifiers must also be ineligible for health coverage from an employer or from Medicaid.
Determining Tax Credit Eligibility
If a single person earns no more than $45,960 of income in 2014, he/she will qualify for a health care credit. A family of four can qualify despite earning as much as $94, 200. Tax credits are only available for those who apply for coverage through state and federal health insurance marketplaces. Those with the lowest incomes will receive the largest tax credits.
How it Works
The payments made under Obamacare are really government-funded subsidies, although they are called credits. Texans may still receive the credit despite not owing income taxes. It is paid directly to health insurance companies when people enroll in health insurance plans. This means Texans will not be required to wait until their taxes have been filed and processed to receive the credit.
The Obamacare tax credit can make the cost of purchasing health insurance through the Marketplace more affordable for individuals and families with low to moderate incomes. For assistance with this or any other tax issue, contact McAllen’s Certified Public accountants of Gonzalez & Arrambide, Inc. at 956-447-9009.