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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Obama Care Tax Credit I make 424% over Federal Poverty Level,

Resolved Question:

Obama Care Tax Credit

I make 424% over Federal Poverty Level,

Question: Can I send money to my 401(k) or other pre-tax deduction like health insurance to be below the 400% poverty level and then receive the obama care tax credit?
Submitted: 3 years ago.
Category: Tax
Expert:  Megan C replied 3 years ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today.

Megan C :

The Obamacare tax credit is based on gross income, not your after tax income - therefore, sending funds to a 401(k) or health insurance won't help you receive the tax credit.

Megan C :

The only way to get the subsidy is if you are 400% of poverty level or below - so your only option would be to earn less

Megan C and 2 other Tax Specialists are ready to help you
Expert:  Megan C replied 3 years ago.
Thanks, Oscar for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.
Expert:  Megan C replied 3 years ago.
Oscar,

I just re-read my info sheet. The credit is based on MAGI, which 401(k) deductions are taken out...so you could put an amount in your 401(k) and get yourself down to 400% of the poverty level.

Thanks!

Megan