By now you probably know that the Affordable Care Act includes a provision that allows for many people to receive help paying health insurance premiums: the premium tax credit.
The premium tax credit is an income based subsidy for those whose annual household income is between 100-400% of the federal poverty limit. The subsidy amount depends on your income, the closer you get to 400% (the top end), the lower your premium tax credit.
Questions naturally arise regarding what counts as income in this calculation. Let me be very clear: We are not tax advisors and don’t pretend to be so.
With that said, here’s one question that comes up sometimes:
Does child support count as income for subsidy eligibility?
Our research brings us to the conclusion that alimony counts as income, but child support does not.
Here’s what we found in one document:
The most common types of income not counted as part of gross income include cash assistance benefits such as… child support, gifts, inheritances, some scholarship income for tuition, most Social Security benefits, and salary deferrals (i.e., contributions to cafeteria/flexible spending plans and “401(k)” retirement plans).
So child support payments do not need to be included in your estimated income when applying for a premium tax credit for health insurance.
The same is true for gifts, inheritances, and other items you see in the list above.
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As always, we invite you to contact us with additional questions or for help in determining your subsidy eligibility.