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Affordable care act take full effect the premium tax

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Affordable Care Act take full effect, the Premium Tax credit will help 20 million Americans afford healthcare (www.treasury.gov). In order to be eligible for the Health Insurance Premium Tax Credit, the household income of the taxpayer must be within 100% and 400% of the Federal Poverty Line. The Federal Poverty Line is the set minimum amount of gross income that a family needs for food, clothing, transportation, shelter and other necessities. This number varies according to household size (www.hhs.gov). Another requirement for the taxpayer to qualify for the Health Insurance Premium Tax Credit is that the taxpayer may not be eligible for other qualifying coverage, such as Medicare, Medicaid, or affordable employer-sponsored coverage (www.treasury.gov). The amount of the tax credit will be fixed based on a benchmark plan. What this means is that families who will chose a plan that is less expensive than the benchmark plan will pay less towards the cost of that coverage. The credit amount will be equal to the difference between the premium for the benchmark plan and whatever that taxpayers expected contribution will be. In order for a taxpayer to realize what their expected contribution will be, the taxpayer will realize
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that the expected contribution will be a specified percentage of the taxpayer’s household income. As the income of a household increases, the percentage will increase with it (www.irs.gov). What is good about the Health Insurance Premium Tax Credit is that it will be refundable. This means that even families who do not make a lot of income and have little federal income tax liability can be the benefits of the full credit. One of the most drastic provisions of the Affordable Care Act is the Individual Shared Responsibility Provision. The IRS website states that: “Under the Affordable Care Act, the federal government, state governments, insurers, employers, and individuals are given shared responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States. Starting in the year 2014, the Individual Shared Responsibility provision calls for each individual in the United States of America to have basic health insurance coverage, qualify for an exemption, or make a shared responsibility payment when filing federal income tax returns (www.irs.gov). All women and men regardless of age who are citizens of the United States will be required by this provision to have the minimum coverage. Those individuals who do not obtain the minimum coverage will be required to pay a ‘shared responsibility payment.’ This will be a sort of penalty for failing to obtain coverage, even the minimum, when there are readily attainable plans available. The payment will be based on how many months out of the year the individual goes without the required minimum coverage and will be the greater of a flat fee amount or a percentage of household income over a threshold amount (www.irs.gov). Treasury regulations provide guidance that tells us that any individual who is covered with the minimum coverage for one day of any given month will be deemed as a covered individual
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(www.treasury.gov).
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