California health insurance - Covered Ca Questions - Covered Ca Income

What Sources Of Income Do They Look At?

UPDATE: A simple guide to getting the most tax credit HERE

A lot of the enrollment process centers around income now since that's the key driver for health subsidies with ACA plans.

First...some credentials Please!....

The difference between getting and not getting a subsidy can mean $1000's of dollars each year so we really want to understand the income section.

Let's look at what the Exchange will request in terms of income.

Broad definition of income requirement

Walking through the online enrollment system, the State is basically asking for your current income data and they estimate that out for the full year.

Essentially, you want to come up with your best estimate current year household gross personal income (MAGI).

For most people, this is the AGI on the 1040 tax form.

Tax free interest, Social Security, and Foreign income may be added back in.

You can always run your quote here:

What types of income do they look at? Here's a list directly from the input screen in the Exchange:

Payroll
Unemployment Benefits
Social Security Benefits
Retirement/Pension Income
Rental or Royalty Income
Alimony Received
Investment Income
Capital Gains
Farming or Fishing Income
Cancelled Debts
Court Awards
Jury Duty Pay
Miscellaneous

You can access the online application here:

There are deductions that you may be able to use to reduce this gross income level:

Certain self-employment expenses
Student loan interest deduction
Tuition and fees
Educator expenses
IRA contribution
Moving expenses
Penalty on early withdrawal of savings
Health savings account deduction
Alimony paid
Domestic production activities deduction
Certain business expenses of reservists, performing artists, and fee-basis government officials

We addressed self-employed or business income issues separately.

It's best to have this information ready before starting either the California Exchange application or the online enrollment.

Many people have complicated income situations (self-employed especially) so please feel free to contact us at help@calhealth.net with your questions.

The income question is one of the trickiest parts and you do not want to mess it up since you might have to pay back tax credit that you were not eligible for.

We can quickly size up your eligible income and tax credit.