QUESTION

What happens to a young adult who applies for premium tax credits the first year he or she is not a tax dependent, and so he or she hasn’t filed a return in prior years?

Individuals with no coverage | How Premium Tax Credits And Cost-Sharing Reductions Work
ANSWER

The biggest challenge a young adult may face in his or her first year of independent tax filing is verifying income, since one of the prime sources of income data is a prior year tax return. However, other methods of verification are available; for instance, the marketplace will have access to monthly wage data that can verify current income. In the case of someone who is self-employed or who has fluctuating income, additional documentation of income may be accepted. The fact that a young adult has not filed in the past will not prevent him or her from receiving premium tax credits when applying for the first time. (45 C.F.R. § 155.320 (c)).

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