My son works part time and has made slightly less than the 10,350 requirement to file a return. he will file a return to get his taxes back that we with held and I still claim him as a dependent. The problem is I need his income to stay qualified with our silver 87 plan as I did not make enough this year. What will happen if I report his income on line 2B of form 8962 “premium tax credit” form and the income is less that the 10,350 requirement.
While your son's earn income doesn't meet the income for filing Single, but because you're are claiming him as a dependent, he has a different filing threshold. If he earns more than $6,300 in 2016 than he is required to file his own return and his Standard Deduction will also be limited. If you are claiming his dependent exemption, he is in your tax household with regards the the Affordable Care Act and you are required to ensure that he has minimal essential coverage throughout the year regardless of whether he earns enough income to file or not. You will include his income on line 2B of form 8962 because he has earned more than the dependent filing threshold.
Additionally, Silver Plans are unique. They are eligible for Cost-Sharing Reduction subsidies (CSR) to reduce copays and deductibles, but they are also unique in another way. If your projected income suddenly drops during the year below the next CSR eligibility threshold (150%, 200%, 250%) then you can enroll in the same plan with the same insurer with a new lower deductible and count the out-of-pocket costs already paid during the year towards it. You should always notify the Marketplace if you have a change in income during the year, but the flexibility of a silver plan can be extremely useful if your family experiences an unexpected reduction in income mid-year.
If your household income drops below 100% at tax time, you are not usually penalized if you meet three conditions. First, you must be enrolled in a Marketplace plan. Second, the Marketplace must estimate your income to be over 100% the Federal Poverty Level at the time you enrolled. Third, you need to have paid all the premiums for that health insurance that wasn't paid for by advanced premium tax credits. If you have done all three, you are also able to claim any additional tax credits your household is eligible for. See line 6 of form 8962.
Tip: While people are not typically penalized if their income drops below 100% of FPL, your state Marketplace may require you to demonstrate eligibility (increased income and financial resources) to be eligible for the Marketplace in the following year. They may encourage you to apply for Medicaid if the state has expanded Medicaid.
Find out more about how to File Taxes for Obamacare.