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Affordable Care Act and Taxes

Authored By: Empire Justice Center and LawHelpNY
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What tax issues might arise for low-income New Yorkers in relation to the Affordable Care Act?

  • Uninsured people who fail to enroll in coverage will face tax penalties unless they qualify for an exception.
  • People receiving the advance premium tax credit (subsidy to help pay for the health care premiums) must file a tax return.
  • Tax filing decisions regarding claiming or not claiming dependents will impact household size in eligibility budgeting for Medicaid and the Advance Premium Tax Credit in the exchange.
  • If the person's income does not match existing IRS tax records (for example, if their income appears to be higher than they are reporting on their application), they may have to provide a lot of documents to prove their income.
  • If they receive the Advance Premium Tax Credit, and their income increases during the calendar year, they must report the increase to the exchange.  The increase may affect the amount of their Advance Premium Tax Credit.  If they do not report the increase, they may face tax liability at the end of the year.  Report changes to income promptly.
Last Review and Update: Nov 22, 2013

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