13. Susan and Stan Collins live in Iowa and are married and have two children ag

Question

13. Susan and Stan Collins live in Iowa and are married and have two children ages 6 and 10. In 2014, Susan's adjusted gross income is $38,000 and stands is $12,000 and both are self-employed. They also have $500 in interest income from tax-exempt bonds. The Collinses enrolled in health insurance for all of 2014 through their state exchange but did not elect to have the credit paid in advance. The 2014 year end form 1095 – A the Collins received from the exchange lists the following information:

Annual premiums....................................................................... $9,800

Annual premium for the designated silver plan in the state...... $10,800

Compute the Collins' premium tax credit for 2014.

Explanation / Answer

Answer:Susan and Stan Collins live in Iowa and are married and has two children under the age of 21 years.

Household income=38000+12000+500=50500

The % of FPL is=(50500/23550)=2.144%

The applicable % is then calculated as:

[(% of FPL-Bottom of FPL range) divided by (Top of FPL range-Botton of FPL range)*(Final %-Intial %)+Intial%.

Thus the Susan and Stan househole of 4 applicable % is:

(214-200)/(250-200)*(8.05%-6.3%)=0.49+6.3=6.79

The amount of deemed premium is=50500*6.79%=$3429

Premium tax credit :Annual premium for the designated silver plan in the state-Deemed premium

=10800-3429=7371

Lesser of Annual premiums or $7371 is premium tax credit.

So Premium tax credit=$7371

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