Can Claiming Your Dependent Affect Their ACA Health Insurance?
If you are considering claiming your parent as a dependent on your tax return, you may wonder how it will impact their ACA health insurance subsidy. Let’s explore this question and provide valuable information about ACA health insurance in this blog.
Impact on ACA Subsidy
When you claim someone as a dependent, their income is added to yours for the purpose of calculating your Modified Adjusted Gross Income (MAGI). MAGI is used to determine eligibility and subsidy amount for ACA health insurance. Therefore, claiming your parent as a dependent could potentially increase your MAGI and reduce their subsidy.
Eligibility for ACA Subsidies
To be eligible for ACA subsidies, you must meet income and citizenship or immigration status requirements. The income limits vary depending on your family size and state of residence. For 2023, the income limit for a single person in the continental US is $54,360.
Other Factors to Consider
In addition to the impact on the ACA subsidy, there are other factors to consider when claiming your parent as a dependent. These include:
Dependent Care Tax Credit: You may be eligible for a tax credit of up to $3,000 per qualifying dependent for expenses related to their care.
Standard Deduction: The amount of the standard deduction is higher for taxpayers who claim dependents.
Personal Exemption: Claiming a dependent reduces your personal exemption, which can increase your taxable income.
Seeking Professional Advice
It is important to consult with a licensed insurance agent or tax professional to fully understand the potential impact of claiming your parent as a dependent. They can help you calculate your MAGI and determine how it will affect your and your parent’s ACA subsidy.
Conclusion
Claiming your parent as a dependent can have a potential impact on their ACA health insurance subsidy. It is important to carefully consider all the factors involved and consult with a professional to make an informed decision that aligns with your financial and insurance goals.
Question? or Need a Free Quote?
Contact Us
Reach out to us for free expert insurance advice and solutions. We will help you solve ACA (Obamacare) related questions and problems. Will contact you within 24 hours of receiving your message.