The Internal Revenue Service is one of four major Federal Agencies responsible in determining an individual and/or families household income and citizenship status for consideration of an Advance Premium (subsidy) tax Credit. The Affordable Care Act will use the Modified Adjusted Gross Income designated by the IRS to determine if a taxpayer is eligible for certain deductions and credits.The IRS will be responsible for the administration of the tax penalty phase of the Affordable Care Act. In 2017, the penalty will be the greater of 2.5 percent of annual household income or $695 per adult and $347.50 per child up to age 18. The familly maximus penalty will be $2,085 in 2017. This means that if an individual does not have health insurance coverage in 2017, they will be required to pay a tax penalty when they file their taxes for the year 2017.
If your income changes over the year, your Advance Premium (subsidy) Tax Credit will be adjusted accordingly. If your income increases, you will have to pay the difference at tax filing time. It will be important that you stay on top of any income change so you have an idea of how much extra you may owe at tax time.