Question: My wife and I sold our primary residence in 2018 with a capital gain of $100,000. We meet the certain conditions to exclude the first $500,000 of gain from the sale of our home from our income and thus don't have to pay taxes on it to the IRS. Because of this fact, is this $100,000 capital gain not counted as income from Covered CA stand point and not affecting the Advance Tax Credits we receive? Thanks
Answer: Covered California considers only taxable income in establishing your eligibility for premium assistance under the Affordable Care Act. Your taxable income is your adjusted gross income (AGI) which can be found on Line 37 of IRS Form 1040. AGI includes capital gains, but since the capital gain from selling your home is excluded from tax in your case, it will not affect your taxable income.