Incorrect answers to the questions on healthcare.gov can cause you to be denied for a tax credit that you actually qualify for. Here are some common reasons people are denied.
Your income is too low.
To qualify for one of the new tax credits, a single adult has to make at least $11,490. So if you entered your income on healthcare.gov as an amount lower than that, you will automatically be declined for a tax credit. Depending on what state you live in, you may qualify for Medicaid. Be sure to put in what you expect your income to be in 2014, especially if it will be greater than $14,940.
You are married, but you and your spouse file separate tax returns.
If you are married, in order to qualify to a tax credit you have to file a joint tax return as a couple. Even if your income qualifies you for a credit, if you check the box on healthcare.gov that says you do not file jointly with your spouse, you will be denied a tax credit. So in order to get the credit for 2014, you will have to file jointly and check the box on healthcare.gov that says you will be doing so in 2014.
Your identity cannot be confirmed.
One of the first steps on healthcare.gov is confirming your identity. If the system cannot find you, you will be allowed to apply for coverage, but you will not qualify for the tax credit. There are various reasons why your identity cannot be verified. Your credit information is used to identify who you are. If they cannot confirm your identity, it is likely because you have little or no credit. Follow the instructions on how to confirm your identity. These could include something as simple as uploading a copy of your driver’s license. This step is crucial. You can skip it, but you will not get the tax credit. It is worth the extra legwork to get this step completed.
You have insurance available through your job.
Just because you have insurance through your job does not mean that you cannot apply for a tax credit. In order to answer the questions correctly, you need to have your employer fill out the Employer Coverage Tool sheet to see if they have a qualifying plan. If they do not have a qualifying plan, you will be eligible to apply for the tax credit. But incorrectly answering the questions about your options at work could cause your application for a tax credit to be denied even though you actually qualify for one.
You have insurance available to you through your spouse’s job.
If your spouse’s employer pays for employee coverage, it is unlikely that you will be able to get the tax credit to buy individual policies for the rest of the family. Even if it is expensive to add on the family to the employee’s plan, it likely disqualifies you for the tax credit if the company pays for the employee’s premium. Have your spouse’s employer fill out the Employer Coverage Tool sheet to find out how to answer the questions on healthcare.gov correctly.
Maneuvering through the Marketplace can be difficult. Your tax advisor or independent insurance agent may be able to help you correctly fill out and answer the questions to maximize your tax credit.