Find a plan.
A TRUSTED INDEPENDENT HEALTH INSURANCE GUIDE SINCE 1999.
Call our agency partners 866-553-3223

Featured

Featured
13 qualifying life events that trigger ACA special enrollment
Outside of open enrollment, a special enrollment period allows you to enroll in an ACA-compliant plan (on or off-exchange) if you experience a qualifying life event.

Latest News & Topics

Latest News & Topics

Featured

Featured
6 lessons Mary Lou Retton’s health scare can teach us about coverage
Mary Lou Retton’s health scare story included some important lessons for consumers, many of whom may assume that the celebrity’s health scare is a sign of barriers to affordable health coverage.
Call our agency partners 866-553-3223
If I get an Obamacare subsidy in the exchange, is the subsidy amount considered income?

If I get an Obamacare subsidy in the exchange, is the subsidy amount considered income?

If I get an Obamacare subsidy in the exchange, is the subsidy amount considered income?

No. The subsidies (both premium assistance tax credits and cost-sharing) are not considered income and are not taxed.

Read more: How the American Rescue Plan has boosted premium subsidies and made health coverage more affordable.

Obamacare subsidy calculator *

1

2

2
+

Add ages of other family members to be insured.

3

Include yourself, your spouse, and children claimed as dependents on your taxes.

4

Modified Adjusted Gross Income (MAGI)

For most taxpayers, your MAGI is close to AGI (Line 11 of your Form 1040).

Estimated annual subsidy

$0

Provide information above to get an estimate.

Find plans

For premium subsidies (premium tax credits), the exchange keeps track of the amount that is paid to your health insurance carrier; it will be reported to you and to the IRS (using form 1095-A) early in the following year.

This is for reconciliation purposes though, not taxation: If your income ends up significantly different than you anticipated, you may have to pay back a portion of the subsidy, or you may receive an additional subsidy when you file your taxes.

Although most people have premium subsidies sent directly to the insurer each month, you can also choose to pay full price for your health insurance coverage and receive your subsidy as a lump sum when you file your taxes, as long as you purchased your coverage through the exchange (off-exchange coverage is not eligible for premium tax credits, up-front or on your tax return). Either way, the subsidy is a tax credit, and is not considered income.

Cost-sharing reductions (CSR, also known as cost-sharing subsidies) are also not considered income. And unlike premium subsidies, there’s no additional reporting or reconciliation involved with cost-sharing reductions. Until 2017, the federal government reimbursed insurers directly to cover the cost of CSR.

The Trump administration halted that funding in October 2017, but eligible enrollees continue to receive CSR benefits. Insurers in most states have simply added the cost of CSR to Silver plan premiums, but virtually everyone who is eligible for CSR is also eligible for premium subsidies, which grow to offset the higher premiums. So in a round-about way, the federal government is still covering most of the cost of CSR, in the form of larger premium subsidies.

From the enrollee’s perspective, CSR benefits are provided throughout the year and nothing further has to be done. CSR benefits are not reported to the IRS, and unlike premium subsidies, they do not have to be repaid if the enrollee’s income ends up being higher than anticipated during the year.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.

Related articles

If you’re self-employed, yes. If not, it will depend on how much you spend on medical expenses during the year.
It's important for the self-employed to know all the ways they can save a few dollars here and there. One obvious place to look is on their tax forms, but ...
If you’re self-employed, you can generally deduct the full amount you pay in premiums without having to itemize your deduction.
A health savings account is a tax-advantaged savings account combined with a high-deductible health insurance policy to provide an investment and health coverage. Deposits to the HSA are tax-deductible and ...
While the Affordable Care Act's premium subsidies help pay the cost of the health insurance itself, cost-sharing subsidies help to reduce out-of-pocket spending for eligible enrollees when they select Silver ...