How to Report Income
The income questions in Washington Healthplanfinder help calculate what coverage you’re eligible for, including the type and amount of financial assistance you can get.
How to report income is one of the most frequently asked questions about applying for coverage – We’ve broken it down to the basics:
- What income do I report for myself and other adults?
- What income do I report for tax dependents?
- What income do I not report?
- How do I report income that changes month to month?
- How do I report self-employment income?
- What deductions do I report?
- How is income verified?
Washington Healthplanfinder will only ask for types of income that are countable when determining what coverage you’re eligible for.
Common examples of income you’ll be asked to include are:
- Income from salaries, wages, tips, and commissions
- Self-employment income minus business expenses
- Unemployment compensation
- Title II Social Security benefits (including retirement, disability, and benefits for survivors)
- Rental income
- Dividends and royalties
Only report income of tax dependents and children who are 18 and younger if their income meets or exceeds the tax filing threshold requirements to file a federal tax return. This rule applies regardless of whether or not the individual actually files a tax return.
The applicable tax filing threshold requirements for tax dependents are:
- Earned income that is equal to or greater than $12,200 or;
- Unearned (investment) income that is equal to or greater than $1,100 or;
- If there is both earned and unearned income and it is equal to or greater than the larger of a) $1,100; or b) earned income (up to $11,650) plus $350.
Please note, the federal tax filing threshold requirements are updated by the IRS every year.
Washington Healthplanfinder will only ask for the income and deductions needed to calculate your eligibility. If you don’t see a place to enter a type of income you get, like child support, it’s because that income type is not needed and you don’t need to enter it.
Common examples of income you don’t need to include are:
- Cash assistance from other agencies or supplemental security income (SSI)
- Child support payments
- Time loss benefits
- Title IV-E and state foster care payments
- Some veteran’s benefits
Washington Healthplanfinder asks you to provide income from the current month. If your income changes from month to month, you can either:
- Enter your actual monthly income, and report the new amount any time your income changes; or
- Average your monthly income over a period of time.
Keep Your Income Current
If your income changes by more than $150 a month, update your account. Reporting income changes as soon as possible will help you avoid paying more at tax time. If you receive more tax credits then you are eligible for based on your year-end income, you may have to pay money back when you file your taxes.
Self-employment can be full-time or part-time and include independent contractors, sole proprietors, partnerships, and corporations. Learn more about your self-employment status.
When reporting self-employment income, you should enter your current estimated net monthly self-employment income (profits after allowable business expenses are paid). Allowable business expenses are available from IRS instructions for Schedule C, E, F, 1065, and 1120 tax forms.
Business expenses can include:
- Car and truck expenses (for travel during the workday, not commuting)
- Employee wages and fringe benefits
- Property, liability, or business interruption insurance
- Interest (including mortgage interest paid to banks)
- Legal and professional services
- Rent or lease of business property and utilities
- Commissions, taxes, licenses, and fees
- Contract labor
- Repairs and maintenance
- Certain business travel and meals
Washington Healthplanfinder will subtract any allowable deductions you might have.
Allowable deductions include:
- Tuition and fees
- Educational expenses, which are tuition and fees paid for out-of-pocket. Do not include living expenses, activity fees, personal expenses, or tuition paid by scholarships, grants, or other financial aid. You can deduct a yearly maximum of $4000.
- For 2021, the IRS is not allowing Educational expenses as a deduction.
- See IRS.gov for more information. (link to IRS)
- Student loan interest
- Individuals are eligible for this if their income is under a certain amount. Visit the IRS’s Student Loan Interest Deduction Tax Topic for additional details.
- Educators expenses
- You can deduct a yearly maximum of $250
- Moving expenses for active-duty military due to an official relocation
- Licensed educator expenses for unreimbursed items, like books, supplies, and other equipment
- Health savings account (a pre-tax/tax deductible contribution to a savings account designated for medical related expenses)
- Individuals can deduct $3,350 per year and a family can deduct $6,750 per year.
- Self-employed health insurance deduction
- Spousal Support/Alimony paid (don’t include child support)
- Does not apply to divorces finalized after January 1, 2019
- Contributions to a pre-tax retirement account payment
Washington Healthplanfinder uses Social Security data and other electronic data available from various federal agencies to verify household income provided on an application. In cases where the information entered cannot be verified, more information will be requested. To keep your coverage, you’ll need to submit the requested information in the specified time frame.