September 08, 2014

Housing Allowance and the Premium Tax Credit


Am I supposed to include my minister’s housing allowance when determining household income for the Health Insurance Premium Tax Credit?


Per final regulations issued by the IRS and Department of the Treasury on May 18, 2012, household income is calculated as follows.[i]

Taxpayer’s adjusted gross income (AGI)
+All Dependents’ AGI (if required to file a tax return)
+Foreign earned income excluded from AGI
+Tax-exempt interest
+Social Security Benefits not included in gross income
Modified Adjusted Gross Income

The above calculation does not include an adjustment for housing allowance; therefore, the minister’s housing allowance that is excluded from federal tax is also excluded from household income for purposes of the Health Insurance Premium Tax Credit.

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