Should I Update My Obamacare Application if My Income Changes?

When most people shop for an Obamacare insurance plan, they usually do so in November during the open enrollment period. This is typically when an individual or family will predict their annual income for the upcoming year.

This is important because your annual income will usually determine if your quality for a tax-credit (subsidy) or how much of a tax-credit you qualify for. Obviously, it’s impossible to predict the future, but we try to give our best guess.

Due to unexpected circumstances and life events, we may find ourselves in a situation where our income will be off from what we originally put on the Obamacare application.

So What if I Make Less Money than What’s on my Application and Don’t Update it?

In this case, assuming you keep paying your premium each month, you will most likely get an additional tax credit when you file taxes for that taxable year.

However, if you do update your application when you notice your income is below what’s currently on it, you will likely get that tax credit now and pay a lower monthly premium.

Okay..But What if I Make More Money than What’s on my Application and Don’t Update it?

If you make more money than what’s on the application and you don’t update it, you will most likely pay the difference in tax-credit back to the IRS when you file taxes for that year.

This could look like a smaller tax return, no tax return, or owing the IRS.

So, in this case, it’s a much better idea to update your application as soon as you realize you will be over your projected income.

If you have any questions about health insurance, always speak with a licensed professional.