If a taxpayer’s 2020 household income of $60,000 places the taxpayer at 350% of the federal poverty level, what is the taxpayer’s normal expected contribution when calculating the refundable tax credit for which the taxpayer may be eligible under the PPACA to purchase a qualified health plan?
ANSWER
| Federal Poverty Level (FPL) | Cost-Sharing Range | |||||||||
| 0% to 133% | ≥ 2% of income | |||||||||
| 133.01% to 300% | 3% to 9.5% of income | |||||||||
| 300% to 400% | ≤ 9.5% | |||||||||
| 400% and higher | Not eligible for premium credits | |||||||||
| In the given problem, with an income of $ 600,000, the tax payer is at 350% of the Federal Poverty Level or FPL | ||||||||||
| Hence, his normal expected contribution as per the table given above will be @ 9.5% of his income = $600000 X 9.5% =$57,000 | $57,000 |
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