How Do Tax Credits Work When Getting Married?
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I am in a domestic partnership but have not yet gotten married. My partner and I are going to sign up for health care coverage in May because we will lose coverage through an employer. My question is if we get married this year, will we then have to take our combined income to sign up for health care or can we still sign up with our individual incomes? According to the information I got, we can both get a tax credit if we sign up individually but will not get one if we base it on combined income. Will we get hit with owing taxes at the end of the year should we get married?
Teresa Aguirre
So if I got married in August of 2020 and my husband has medicare and we do not need a family plan for Obamacare, just a plan for me, do I still have to claim all of his income for 2020. That means no subsidies?
ObamaCareFacts.com
If you are married the spouse’s income does impact subsidy eligibility for marketplace plans. With that noted, in the year of marriage, you can do an alternative calculation for the year of marriage as explained on form 8962. The end result of that is that getting married should only negatively impact your tax credit eligibility for part of the year. You can see our page on the 8962 form for all the proper forms and instructions, but here are some additional resources:
https://www.npr.org/sections/health-shots/2015/04/28/402642205/how-getting-married-affects-health-insurance-tax-credits#:~:text=The%20amount%20of%20the%20tax,you%20signed%20up%20for%20coverage.&text=However%2C%20when%20people%20marry%20during,credit%20they%20have%20to%20repay.
http://cs.thomsonreuters.com/ua/ut/2018_cs_us_en/utwapp/kb/1040-us-affordable-care-act-alternative-calculation-for-year-of-marriage-data-entry.htm
Gregory Lintz
We were married in Oct. I maintained an Obamacare plan (with subsidy) until December when I became eligible for participation in my spouses plan. When married, I would no longer be eligible for assistance as our combined income exceeds the 400% threshold. How does this affect my subsidy for the ten months I was eligible as a single person?
ObamaCareFacts.com
You need to do an alternative calculation found in the later sections of the 8962 instructions/form. Essentially you, in terms of the credits, file as single for the months you weren’t married and married for the months you were. So the months before marriage you likely won’t have to repay and the months after, if you have taken credits, you likely will.
There are a lot of specifics in there, so you should check yourself (and perhaps get assistance from a tax professional), but that is the gist.
Lynn Woosley
I married my wife who was on Obamacare in June and put her on my United Healthcare. When doing taxes, to our surprise, we owed over $5000. Apparently we had to repay for six months ofObamacare even though she was single for those six months. If we had known of this we would have gladly waited until January to marry.
Florencia
Hello. I was on my parents obacamare in 2016. I got married in November , so I have to file with my husband. However , my parents need my taxes due to being on their obacamare for the year. What do we do?
ObamaCareFacts.com
You can only be in one tax family at a time. It really depends on the specific situation. You can’t be on your parent’s taxes and your husbands at the same time, so you have to pick the one that makes the most sense and complies with the rules. You for sure would want to seek professional assistance in a case like this.
Nathanial Hughes
My wife and I got married on Sept. 24th 2016. She had Obamacare in 2016. I had insurance through my work in 2016. I added my wife to my insurance in October 2016. I made roughly 65K, she made 18K. She was essentially single for 9 months out of the year in 2016. We went to get our taxes done only to find out that the refund money that we were going to use to help buy a house, was being taken away because we somehow “Owe” full price for ALL YEAR in 2016 for her insurance even though she was single for 9 months and shortly after placed on my insurance in Oct. 2016. How can this be legal or ethical and is it correct?? If there is an ethical, lawful way around this mess. What should I tell my tax preparer to do? Is there a way to only pay full price for the last quarter? (Even though she didn’t need it and couldn’t cancel) …The cancellation finally took place on Jan. 1st 2017.
Side note: (She called 5 times to cancel. We confirmed cancellation and we’re still receiving bills into 2017)
Jim Anderson
This is a poor way of handling the marriage year with Obamacare. My daughter was a grad student and on Obamacare with no income during that time. Once married, she still had to be on Obamacare until all the paperwork was complete to add her to her husband’s plan. She started working in August and their combined incomes for the year barely put them out of the range for a tax credit. She paid the full premium so was hoping for some credit back for those months…
ObamaCareFacts.com
On 8962 there are some options to do things like split the year, but it can certainly still result in paying back credits.
Marriage and divorce certainly complicate tax credits.
Lynn Woosley
Apparently it was one of those BS things somewhere in those 2500 pages no one bothered to read. Obviously no one would ever get married other than January if this was a known fact. As if I don’t already pay enough in taxes. I realize ur just answering these but I’m sure for most people who have this situation, common sense tells u that she was single for those 6 months and was required to have this. Apparently I’m punished for marrying someone on Obamacare in the wrong month.
David
This is insane! I got married to my wife towards the end of the year and now we are finding out we have to pay almost $2,000 in tax credits. I don’t make THAT much and her income was significantly lower. I feel like I’m being penalized for getting married. 🙁 It’s like somehow getting married at the end of the year all of a sudden means you were capable of affording the mandated insurance all along and your spouse is not on the hook for owing it.
Darlene Myers
This site is very helpful, HOW DARE OBAMA make me pay back the tax credit that I could hardly afford the insurance in the first place JUST BECAUSE I GOT MARRIED.
So my understanding is that since I got married in 10/16, I have to pay back the amount they supplemented so that I could afford it just to make my new spouse and I broke again? makes no sense
Darlene Myers
This site is very helpful, HOW DARE OBAMA make me pay back the tax credit that I could hardly afford the insurance in the first place JUST BECAUSE I GOT MARRIED.
I hope he dies!
Jacqueline Batton
When I filed for obama care my husband was all for it. Now its tax time, he worked over a lot this year so now we owe. Because of that hes filing seperate. How is that going to affect me tax wise. How much will it cost me
Diane
When I called Covered California before my marriage they gave me poor advice that will cost us thousands. I have learned that we should have gone to an accountant before our wedding date was established. Since my spouse makes considerable more money than me, he is being penalized for marrying me and has to pay the tax credits I received AS A SINGLE WOMAN, in that year, back. It is so unfair. The people on the phone at Covered California had told me “not to worry”and “of course you will not be penalized before the marriage”. My bad for trusting the clerk knowing what they were talking about. Had I known the truth, we would have been married in January the following year. Do you know of any recourse I can take or am I Sh@*^ out of luck?
Michael Grodsky
Good answer, but wrong on one point:
All members of a “Coverage Family” do NOT need to be enrolled in the same family plan in order to receive the full amount of tax credits for which they are eligible. Advance premium tax credits can be applied to only one plan, but at tax time a Coverage Family member enrolled in a separate qualified health plan will certainly be included in the calculation of the tax credit.
The IRS definition of “coverage family” from the Instructions for Form 8962:
Your coverage family includes all individuals in your tax family who are enrolled in a qualified health plan and are not eligible for minimum essential coverage (other than coverage in the individual market).
Non-IRS resources are handy, but get your tax advice from a qualified tax advisor.
ObamaCareFacts.com
Thanks for the catch. This can be hard to explain. And I agree, as a non-IRS resource who is offering free information that is not to be mistaken for legal or tax advice…. I 100% suggest people always consult a tax, medical, or legal professional respectively.
I have to re-read the instructions again. Thanks for the note. Those who want to verify themselves, 8962 instructions are bellow (do a command find for “coverage family”).
https://www.irs.gov/instructions/i8962/ch02.html
Moriah B
I got married in Oct 2016. My husband has Obamacare and makes about $42,000 a year. I am unemployed. I have no idea how this stuff works(just being honest). Do we need to sign up together? Seperate? Medicaide for me? I guess he claims me as a dependent? And will this effect the subsidies he receives for his premium? So many questions!
Carla
Hello,
I am married with a foreigner. He has not income in the USA, he does not live in the USA and he does not have a SSN. According to the IRS, I have to file married filling separately because he does not live in the USA.
In the other hand Obama Care law said that for getting the credit tax, I have to file married filling jointly.
What should I do?
How is this going to affect my Obama Care tax credit?
Mike Ace
I just got married on August 2nd. My wife has ACA with her 21 y/o son who lives at home. I want to move them into my employer’s insurance plan since I am already paying for a family plan. How does this affect me when I do my taxes? Will we have to pay back the ACA fees before the marriage?
Pam Hubenak
I had Obama care for the year of 2015. I got married the 1st of November of 2015 and started on my husband company insurance that December. Now the government wants me to pay back all 12 months of insurance subsidiaries because my income level went up before the year ended. How can this be?
Josh
The answer above is very misleading.
It states “But here is the gist, in essence you claim your tax credit based on your income up until you get married, then you’d switch to a family plan when you get married, and then claim the tax credit from the month you got married forward based on that household income.”
This is not true! It would be okay of you really got to claim your income before you got married but Pub 974 only allows an alternate calculation based on half your combined income for the before marriage months. Half your combined income will still be much higher then your real income for those months. It is a very small relief if any. If you get married and you have Obamacare but your spouse does not and makes quite a bit more than you, plan on paying almost all of your credit back.
ObamaCareFacts.com
Thank you so much for the clarification. This part of things can be a little complex. I’ll update the answer!
Katie jackson
I currently have an Obama Care Health Plan and the employer that I work for doesn’t offer insurance. My fiance Works full-time for a company that does offer insurance but once he and I are married he will not be able to afford to add me to it because after the premium costs he would not have a paycheck left. I make about $15,000 a year and he makes about 30,000 a year. He doesn’t even get to take most of it home because he does have 3 children that he pays child support on. My question is will I still be able to have an Obamacare plan once we get married in January? An even bigger question that will I qualify for any kind of subsidy once we are married? Will his entire gross income count as my income as well even though most of his income is deducted out? Please help!
J Lee
This is a great answer, and what I am realizing after going through all the steps and worksheets in 8962 and pub 974. I was unemployed and received PTC for Jan – May of 2015, and got married in June. My spouse made 90k, so when we filed jointly, I got a letter from IRS requiring to fill out 8972 and reconcile the amount I was eligible for.
And even though during the months I received PTC I was actually eligible, the total household income with my spouse used for tax return says I was not. This is because PTC is calculated based on the PROJECTION of your annual income, so if that ends up being much higher because of marriage filing jointly, then you’re screwed and need to pay back the PTC. In our case, because even using half of the income for alternative year or marriage calculations was still much higher than the poverty line, I basically need to pay back all the PTC received (~$947). I think the only thing that makes filing jointly still worth it is that it still reduces our total taxes by a larger amount.
Glenn
Typical government answer that helps no one.
ObamaCareFacts.com
Always looking for a reader to offer help, although criticism is also welcome. I suggest that the links given above are actually very helpful.
Juan Carlos
I got married on december 22nd last year, my wife was enroll with obamacare thru the year based on her only income, now that i am trying to do my taxes she needs to paid back the credit from obama care for all 2015 year like if we got married on Jan 1st 2015. All this because now they take in consideration my income, She was single most of the year… her status change december 22nd 2015. why does she has to paid back ? if she was single and her income was the same thru the year. Is there anything that we can do?
ObamaCareFacts.com
There are alternative filing options for the year of marriage on form 8962 (and exemptions can be taken with 8965). This should fix most marriage related problems in regards to ACA tax credits, although some families will find that marriage affects things like the fee and tax credits negatively despite this.
TracyW
My wife and I married on December 24th and we are being required to pay back all of the substitutes she received last year; seven days. Pub. 947 was absolutely no help and was so poorly written not worth the frustration.
The best advise I have is if you are going to get married do so in January.
Ashley
I got married in September 2015, before then we did not live together. I called to report the change to the marketplace and was told that my current coverage would stand as is until the end of December. Well now with both incomes we no longer qualify for 2016 coverage, and will have to go through his employers insurance when their open enrollment starts in February. Do we need to file our taxes together for 2015 income taxes?
ObamaCareFacts.com
There are special rules for filing in the year of marriage. Do yourself a favor and get in-person tax help. You’ll be able to see where to adjust credits by looking at the Advanced Tax Credit from 8962.
Delfina Sefcik
I have obamacare and make lower than 20 thousand yearly. Recently got married, my husband make more than 100’s yearly, and have insurance for his 3 kids. I’m concerned. Can I loose my Obamacare Insurance when I change my status.
ObamaCareFacts.com
Yes, getting married will put you over the limit most likely. https://obamacarefacts.com/federal-poverty-level/
You won’t lose your coverage, but you will lose your cost assistance. One of the weird side-effects of the ACA, some safety net programs, and things like housing and college debt, is that they can disincentive marriage. In your case it shouldn’t be too big of a deal, you pay more but you have more money combined to help absorb those costs. Just realize cost assistance is based on annual MAGI, you’ll need to file the alternate part of the 8962 form to differentiate between before and after you got married for tax credits. You can claim your before marriage credits, but will have to forgo your after marriage ones.