Expanded Tax Credit for those receiving unemployment

  • If a taxpayer in the household receives or is approved to receive unemployment compensation (UC) for any week beginning in 2021, the taxpayer may be eligible for a premium tax credit that covers 100 percent of the premium for the benchmark Marketplace plan for the entire household, regardless of the taxpayer’s actual household income amount.
  • This benefit also applies to consumers who receive or are approved to receive UC for any week beginning in 2021 and have incomes below 100 percent FPL and live in states that have not expanded Medicaid.
  • Starting July 1, 2021, HealthCare.gov will allow qualifying consumers to access new premium tax credits. Consumers should return to HealthCare.gov after July 1 to update and resubmit their applications. They will need to select the option to “Report a Life Change”, update their application, and confirm their plan selection.
  • A new question is being added to the Marketplace application for consumers can attest to having received or being approved to receive UC for any week beginning in 2021. If the consumer is currently receiving UC, then they should select the income type “unemployment”. Otherwise, they will attest that they have previously received it or approved to receive it.
  • Any UC from a state or federal program qualifies consumers for the new tax credits. The UC benefit only applies for 2021.
  • If eligible, new premium tax credit benefits will be applied prospectively beginning on the first of the month after making updates. So, current enrollees can have these new benefits applied as of August 1 if they complete their updates by July 31. Consumers will be able to claim credits for prior months (January – July) when they file their 2021 tax return.
  • If taxpayers do not go back to the Marketplace to update their application, they may still claim these additional tax credits when they file their 2021 tax return. CMS is continuing to look at automating the application of these benefits for consumers who have already attested to receiving UC in 2021 and who do not return to the Marketplace.
  • In households where only a tax dependent receives or was approved to receive UC in 2021, then the expanded tax credits only apply to that dependent – not the entire household.
  • Qualifying consumers will be treated as if their household income is 133 percent FPL for purposes of determining tax credits and applying cost share reductions.

The CMS press release on this new benefit was released earlier today:

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