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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Household Income Subsidy Issue

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Question: I understand IRS data will show up as the individual applies for exchange, but isn’t subsidy based on household income and if so how will that coordinate?

Answer: If more than one tax return is filed within a household, you would probably have some options. Let’s say the household consists of a husband, wife, and 24 year-old daughter. The parents filed jointly. but the daughter filed a separate return. I would think you could either combine both incomes and test the subsidy-eligibility for that household as a family of three. The second option would be to for the parents to qualify separately from the daughter based on their separate incomes. Note that this answer is an educated guess. I have not seen any specific rule treating this situation.


This brings up many different scenarios/possiblities that could be played out…we have such a huge task at hands to help guide clients in this new marketplace. I have already started reaching out to my local Tax prepares so that they know to call me when they have clients that need assistance.

Your answer is an interesting and creative concept that I agree with. When will the IRS make a determination about this approach??

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