Three basic jurisdictions of the Affordable Care Act

Three basic jurisdictions of the Affordable Care Act

Health insurance with Tax credit:

The legislation grants a tax credit to low and middle income taxpayers. Beginning in 2014, there will be a Refundable Premium Assistance Credit (Premium Assistance Credit) mainly for qualified individuals and families who buy health insurance through a stock exchange. The reimbursable credit will be paid to the insurer to finance the purchase of some health insurance policies. An eligible person registers in a plan offered through a stock exchange and transfers his income to the stock market. The stock market analyzes the information and calculates the credit. The IRS pays the insurer. The amount of the premium that the person pays to the insurer is the cost minus the credit. Employees pay with payroll deductions.

The loan is available to individuals and families at certain income levels, as long as they are not eligible for Medicaid, employer-sponsored insurance or other acceptable coverage.  Proof of income is up to 400% of the federal poverty line. The income thresholds are approximately $ 45,000 for one person and $ 90,000 for a family of four.

Costs for the richest taxpayers:

Increased Medicare taxes: Medicare supplements will be granted to singles who exceed $ 200,000 and couples over $ 250,000. There is also a new Medicare investment rate.  Medicare taxes are the main source of funding for the Medicare hospital program. The program pays the hospital bills for participants over 65 years and the disabled. Currently, workers and employers each pay about 1.45%. Self employed workers pay on both sides about 2.90%.  According to the new law, most taxpayers continue to pay the health insurance tax of 1.45% in 2013. Hospitals that earn over $ 200,000 and couples who earn over $ 250,000 will have an additional tax of 0.9% (a total of 2.35%), an excess of these principal amount. Self-employed workers pay 3.8% for income above the threshold.

Medicare tax on investments: At the moment, Medicare tax is only set on wages. Starting from 2013, capital gains will be taxed for the first time with a Medicare tax. The new 3.8% tax is applied to the net income of a single taxpayer with an AGI that exceeds $ 200,000 and the joint taxpayer over $ 250,000. Net investment income consists of interest, dividends, royalties, income, gross income of a company or business that includes passive activities and net profit on the sale of real estate (excluding real estate held in a business or trade). Net investment income includes deductions from income. Another investment option can be found at to invest in your health.

Tax Council

The new tax does not apply to old age accounts such as the 401 (k) plans. In addition, Medicare tax applies only to income that exceeds the $ 200,000 / $ 250,000 threshold. For example, a joint deposit of the marriage deposit will have $ 200,000 in wages and $ 100,000 in profits and $ 50,000 in taxes.  The employer’s mandate: This is relevant for an employer who has employed at least 50 full-time employees on average. This tax term is a “valid large employer” that employed an average of at least 50 full-time employees in the previous calendar year.