Ask The Hammer – Premium Assistance Tax Credits
The Hammer goes over what you need to know about Premium Assistance Tax Credits that are part of the American Rescue Plan ACT (ARPA).
Key Takeaways
- Households earning up to 150% of federal poverty line now qualify for completely free Silver health plans in 2021-2022, with premium assistance credits covering 100% of costs
- High-income earners (above 400% of federal poverty line) now phase out gradually at 8.5% of income instead of facing a hard cutoff, making the subsidy reduction more gradual
- No need to repay overpaid premium assistance credits from 2020 on your 2020 tax return, relieving cash flow pressure that occurred with prior-year clawbacks
- Income-generating activities like Roth conversions carry reduced penalty risk in 2021-2022 due to the 8.5% cap, but plan ahead since these benefits expire after 2022
- Consider all income thresholds affecting you beyond just tax brackets—property tax breaks, healthcare subsidies, and other benefits can be lost due to income increases
Ask The Hammer - Premium Assistance Tax Credits: In this episode of Ask The Hammer, Jeffrey Levine goes over what you need to know about Premium Assistance Tax Credits that are part of the American Rescue Plan ACT (ARPA). Watch more episodes of Ask The Hammer at this link: https://www.finstream.tv/videos/ask-the-hammer/
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