Change in Job income and using market research Insurance

[User08]

I have a change of income from a full time to a part time job. 

I'm using the Home State Insurance that I found through market research.

How does having Home state insurance coverage affect my income tax return? 

[heidis1]

Hi User08, You have a change in income from full time to part time with Home State Insurance. If you received the Home State Insurance thru the Marketplace, you will have form 1095A Health Insurance Marketplace Statement that can be found on Healthcare.gov . This form will be needed to file your tax return. Hope this helps. Thank you for asking. 

[Tax Hero Niki]

Hi User08. Excellent question and way to be proactive! When your income changes and you have health insurance through the marketplace, you should report the change. It may change the amount of your Premium Tax Credit, and the amount of it that you receive in advance to help lower your monthly premiums.

To update your income, follow the steps here: https://www.healthcare.gov/reporting-changes/

Like Heidi says, when you file your taxes, you will then use the 1095-A that reports the amount received in advance to help lower your premiums. You've got the right idea. Report the change in income now, to avoid any surprises at tax time.

[User08]

Does this means that the premium amount reported in form 1095-A will be deducted from tax return?

This is my first time using this type of insurance and I just want to know exactly how this affect my taxes.

Thanks!

[User08]

I understand that this will be reported with form 1095A.

I think my question is how does using this type of insurance affects my income tax return? 

Does the amount in the 1095A form gets deducted from my return? 

Thanks!

[Tax Hero Niki]

Hi User08. The link provided above is a great resource and explains in more detail the process. Marketplace health insurance can impact the amount of your tax refund, but it's not a simple answer.

When you apply for marketplace insurance, you report an estimate of your income for the year. Then, the marketplace determines how much they will help you with your insurance premiums, based on your estimated income. When you prepare your tax return, you now have your exact income, and no longer an estimate.

The 1095-A reports how much help you received in advance to pay for your health insurance. You can either get more money back in your tax refund, if you didn't receive enough in advance. Or, you may have to pay some of the advance back, if your income turns out to be higher than your estimate, which would decrease your tax refund. 

That's why it's necessary to report changes in income when you're enrolled in a marketplace health insurance plan.