Self-employeds who are eligible for the premium tax credit can’t double dip. They must reduce the health insurance deduction that goes on the front of the 1040 by the amount of the credit. IRS has issued rules on how to compute this limitation. Check out www.kiplinger.com/letterlinks/secredit to view the guidance in full.
Despite a recent legal setback, the premium credit remains available. The health reform law says people who buy insurance through a state-run exchange can get a credit. IRS regulations also allow the credit to folks who buy coverage from the federal exchange. Last month, an appeals court panel invalidated IRS’ rules. The same day, another appeals court upheld the Revenue Service’s regulations. Pending final legal resolution of the issue, IRS will continue to allow advance credits.