What is the estimator?

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What is the estimator?

When your life changes, the amount of your premium tax credit can also change. Life changes may affect the amount of your premium tax credit, but will not affect your advance payments of the credit, which is an estimate of your premium tax credit, unless you notify the Marketplace of the change.

For example, if you estimate your income will be $25,000 for the year but you get a new job that increases your income to $30,000, your prepayments on the credit may be too high. Your premium tax credit may be less than your advance credit payments, resulting in additional tax liability for you. To prevent this, please notify the Marketplace of the change.

Remember: this tool only gives you a budget. Your premium tax credit is figured on your tax return using Form 8962 .

This estimator does not estimate changes in the premium tax credit when:

  • You move to a different ZIP code.
  • You marry or you divorce.

How does the premium tax credit work?

You can choose to have credit advance payments paid directly to your insurance provider; this will help offset premium costs. Then, when you file your tax return, list the advance payments and reconcile them to the actual amount of the credit.

You can also opt out of advance payments and receive premium assistance provided by the one-time credit when you file your return.

In both cases, you will need to claim the credit on your tax return.

Credit is based on your:

  • Total household income for the year,
  • Family size (you, your spouse and dependents),
  • Civil status,
  • address and
  • The number and ages of enrolled family members who are not eligible for other health coverage.

How does the market determine my credit?

If you elect to receive prepayments of the credit, the Marketplace determines your eligibility for prepayments of the credit using projections of your income and the number of personal exemptions (you, your spouse, and dependents) when you enroll in a qualified health plan.

If this information changes during the year and you don’t notify the Marketplace, the amount of your prepayments of the credit may be materially different from the amount of the premium tax credit you accept on your tax return. What Does An Insurance Estimator Do?

What kinds of changes can affect my credit?

Changes in circumstances that may affect the amount of your premium tax credit include:

  • Changes in your household income,
  • Birth or adoption,
  • marriage or divorce,
  • Moving to a different address,
  • Gain or lose eligibility for other health care coverage, and
  • You need to provide:

    1. An estimate of your monthly income
    2. The size of your family (includes you, your spouse, and your dependents),
    3. The age of each family member enrolled in Marketplace coverage and whether they are eligible for non-Marketplace coverage (for example: coverage through an employer, Medicare, or Medicaid),
    4. Your marital status for the purposes of the expected statement,
    5. The state and county where you live,
    6. The cost of the reference plan used to calculate your advance credit payments if you live in a state that does not participate in the federal Marketplace on Salud.gov,
    7. The monthly premium for the health insurance in which you are enrolled and
    8. Monthly advance payments of your coverage’s premium credit (if applicable).

    If you live in a state that participates in the federal marketplace, the estimator can provide an estimate of your baseline plan amount. If you received a different reference amount from Salud.gov, use that figure instead.

    The Small Business Health Care Tax Credit

    This credit is designed to help you offset the costs of providing health insurance to your employees.

    If you are a small employer and meet certain requirements, the credit can be up to 50% (35% for eligible tax-exempt employers) of the premiums you pay for providing health insurance.

    This information is just an overview to help you understand credit and how it can benefit you.

    More details about the credit and its IRS requirements can be found in the Tax Provisions of the Affordable Care Act and from the Instructions for Form 8941.

    Eligible Small Employers

    There are three basic requirements to be eligible for the Small Business Health Care Tax Credit. They are:

    1. Paid premiums for employee health insurance coverage under a qualifying agreement.
    2. You had fewer than 25 full-time equivalent (FTE) employees for the tax year.
    3. Paid median annual wages for the tax year of less than $55,000 per FTE in 2019.Other changes that affect income and your family. welding martial 

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