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Question: Which of these events could impact your Obamacare subsidy amount: taking a promotion that includes a pay raise or experiencing a lull in your freelance work that decreases your income?
If your income changes after you buy health insurance and start receiving an advanced premium tax credit subsidy, you have to report it—whether it goes up or down.
When you buy an Obamacare plan and apply for an advanced premium tax credit, the amount of subsidy you are eligible for is based on your expected income and household size for the year ahead—not the previous year. As such, your Obamacare subsidy may fluctuate with your income.
To find out how an income change could impact your premium tax credit amount, you can use a subsidy calculator tool such as the one available at healthedeals.com.
No matter how often your monthly income changes—one time or 12—you must immediately report it to the state-based or federally facilitated health insurance exchange from which you purchased coverage and applied for a subsidy.
You can report income changes online, over the phone and in person. Visit HealthCare.gov to learn how to report changes online in states that use the federal exchange portal. Click here to find your state’s exchange website.
You must report these changes every time they occur. Your advanced premium tax credit will be adjusted accordingly, and you may find your next health insurance premium is more or less than what you previously paid.
If you fail to report changes, you may:
If you have questions about changes that impact your advanced premium tax credit or reporting such changes, contact your state-based or federally facilitated exchange. Speak with your accountant or tax adviser if you have other questions regarding Obamacare and your taxes.
There are other changes in life circumstances that can impact your Obamacare subsidy amount. They include but may not be limited to increases or decreases in household size as well as moving to a different address or gaining or losing eligibility for government-sponsored or employer-sponsored healthcare coverage.
If you are already receiving an advanced premium tax credit, you must report changes through the remainder of this year. As mentioned above, if you fail to do so, you may see an impact at tax time when you must claim and reconcile your Obamacare subsidy using Form 8962.
Those with incomes that tend to vary a lot throughout the year (e.g., individuals who work freelance) may find they don’t want to be reporting changes frequently. These individuals might opt to skip the advanced premium tax credit option and instead do either of the following:
Remember: You must purchase your Obamacare plan through a state-based or federally facilitated health insurance exchange to qualify for subsidies.
Click here to read more about your options, or call the number at the top of your screen to speak with a certified advisor who can assist you.
 Internal Revenue Service. “Premium Tax Credit: Claiming the Credit and Reconciling Advance Credit Payments.” IRS.gov. Last reviewed or updated May 23, 2018. https://www.irs.gov/affordable-care-act/individuals-and-families/premium-tax-credit-claiming-the-credit-and-reconciling-advance-credit-payments