How to estimate income for Covered California

Any financial subsidy through Covered California is based on what you expect your household income will be for the coverage year. When you estimate your income, you will need to include the entire household income including you, your spouse and anyone you claim as a dependent on your tax return.

You can begin by using your adjusted gross income (AGI) from your most recent federal income tax return, located on line 11 on your 2020 Tax Return 1040. For those who are self-employed or unemployed, it is best to estimate as accurately as possible, and then report changes in income throughout the year.

When you file taxes in the following year and you collected financial subsidy you should not have, the amount you owe will need to be repaid back to the IRS.

That is how the IRS reconciles your advance premium tax credits and this is why it is important to keep your income updated throughout the year.

Skyline Benefit is a Covered California broker with extensive experience and knowledge about Covered California insurance carriers, plans and coverages. Call us today and get a free consultation and quote.

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