Will Jocelyn and Larry include Hank's $5,000 as part of their Household Income for ACA purposes?
No, Jocelyn and Larry cannot include Hank’s $5,000 as a part of their household income for ACA purposes. Hank’s income is below the filing threshold for a dependent so Jocelyn and Larry cannot include his MAGI for ACA purposes. MAGI stands for Modified Adjusted Gross Income for an individual. Only if MAGI is $13,590 will a person qualify for ACA tax deductions.
Understanding Household Income and ACA
Household Income: Household income is an essential factor when it comes to determining eligibility for certain benefits and tax credits, including those under the Affordable Care Act (ACA). It typically includes the income of all individuals living in the same household.
ACA Purposes: The Affordable Care Act, also known as Obamacare, aims to make healthcare more affordable for individuals and families across the United States. It provides subsidies to help lower-income individuals and families access healthcare coverage.
Income Inclusion: In the case of Jocelyn and Larry filing jointly and claiming Hank as their dependent, Hank's part-time income of $5,000 would not be included in their household income for ACA purposes. This is because Hank's income is below the threshold that would qualify him as a dependent for tax purposes.
MAGI Threshold: The Modified Adjusted Gross Income (MAGI) plays a crucial role in determining eligibility for ACA tax deductions. If an individual's MAGI exceeds a certain threshold, they may not qualify for subsidies under the ACA.
Impact on ACA Tax Benefits: Since Hank's income does not meet the criteria to be included in Jocelyn and Larry's household income for ACA purposes, it would not affect their eligibility for ACA tax deductions based on their household income.
In conclusion, Jocelyn and Larry will not include Hank's $5,000 income as part of their Household Income for ACA purposes due to the income threshold requirements and eligibility criteria set forth by the Affordable Care Act.