Does CD Interest Count Towards Obamacare Income?

Does CD Interest Count Towards Obamacare Income?

Are you wondering how interest from certificates of deposit (CDs) affects your Obamacare eligibility and premium tax credits? Here’s what you should know:

What is Obamacare?

The Affordable Care Act (ACA), also known as Obamacare, is a comprehensive health care reform law that was enacted in 2010. One of the key provisions of the ACA is the establishment of health insurance marketplaces, where individuals and families can purchase health insurance plans.

How is Obamacare income calculated?

When determining your eligibility for Obamacare subsidies and premium tax credits, your household income is calculated based on your modified adjusted gross income (MAGI). MAGI is your AGI plus certain types of tax-exempt income, such as foreign earned income, tax-exempt interest, and the non-taxable portion of social security benefits.

Does CD interest count towards Obamacare income?

Yes, CD interest is considered tax-exempt interest and is therefore included in your MAGI when calculating your Obamacare income. This means that interest from CDs can affect your eligibility for subsidies and premium tax credits.

How can I reduce my Obamacare income?

There are a few ways to reduce your Obamacare income and potentially qualify for lower health insurance premiums. These include:
Contributing to a Health Savings Account (HSA) or Flexible Spending Account (FSA)
Making deductible contributions to a traditional IRA or 401(k)
Claiming certain tax deductions and credits

It’s important to note that reducing your Obamacare income may also affect your eligibility for other government programs, such as Medicaid and food stamps. Before making any changes to your income, it’s a good idea to consult with a tax advisor or financial planner to discuss the potential impact.

How can I get help with Obamacare?

If you need help understanding Obamacare or enrolling in a health insurance plan, you can contact a licensed health insurance agent or visit HealthCare.gov. You can also get free help from ACA navigators, who are trained to provide information and assistance with Obamacare.

Conclusion

Understanding how CD interest affects your Obamacare income is important for determining your eligibility for subsidies and premium tax credits. By carefully planning your finances, you can potentially reduce your Obamacare income and qualify for lower health insurance premiums. If you need help with Obamacare, don’t hesitate to reach out to a licensed health insurance agent or ACA navigator.