Question: My wife & I both are 61. We retired with our 2012 tax return income of $56,410 and need to take a distribution from my IRA for $32,000. Added to our 2013 income it would be a total of $77,000. Our 2014 income would be $49,500. Would our 2013 income disqualify us for tax credit for premium assistance in 2014 or 2015? Your answer would be deeply appreciated!


Answer: Your eligibility for premium assistance in the form of a subsidy is based on your income during the year the coverage is in force. For a policy that is effective in 2014, it will depend on the amount you earn during that year. Your 2013 income would not be taken into account. Since you can only estimate your income for the year at the time you obtain coverage, your subsidy may be adjusted retroactively based on your actual earnings when you file your income tax return. You may have to pay back some or all of subsidy if your income is higher than your estimate, and you may receive an additional subsidy if it is lower. However,in your case the expected earnings for 2014 seem fairly certain.

Robert I. Field, Ph.D., J.D., M.P.H. is a professor of law at the Earle Mack School of Law and professor of health management and policy at the School of Public Health at Drexel University. He also writes for The Field Clinic blog. Ask Rob your questions about the new healthcare law.