New federal tax rules have been amended and rewritten to help support victims of domestic violence, who have separated from their abusive spouses, in claiming healthcare subsidies. The federal tax rules were recently revamped as a result of public outcry to the 2010 Affordable Care Act rules that granted healthcare tax credits for buying insurance only in the cases where the married couple filed their taxes jointly. Originally, married people who filed their taxes separately were not permitted to file for these tax credits. Many groups, as a result, were being financially disadvantaged as a result; victims of abuse, people whose spouses were imprisoned or had disappeared, or couples in the middle of divorce were a few of the identified groups that were unable to claim the premium tax credits due to the original wording of the Act.
The original wording of the Act determined the eligibility for premium tax credits by requiring that an individual must be: a taxpayer who is not a dependent of another taxpayer, who files a married joint tax return (if applicable), and whose household income was 100 percent to 400 percent of the federal poverty line (about $11,500 to $45,960 for an individual) based on the number of household members within the taxpayer's family.
Victims of domestic violence, based on the original wording, were required to file their taxes jointly with their abusive spouses, and many were forced into a situation where they would need to contact their abusive spouses so as to file a joint return, even at the risk of harm or further trauma.
Many, as a result, would be forced into reconciliation for the purpose of receiving the tax subsidies. Ultimately, the victims of domestic violence who were still married to their abusers for one reason or another were required to choose between their own safety, trauma, and decision to separate from their spouse or receive the benefit of tax subsidies for health insurance. Victims of domestic violence, ultimately, were in a lose-lose situation.
New Qualifications for 2014
The Internal Revenue Service has added for the 2014 fiscal year, in connection to the new ruling for domestic violence victims, that a married taxpayer qualifies if he or she:
- Files the 2014 tax return as married but filing separately;
- Lives separately from his/her spouse at the time of the tax return filing;
- Claims that the reason for filing separately is due to the circumstances of domestic violence; and
- That he or she can show that b) and c) are present.
The new ruling also permits an extension for those who have yet to register for Obamacare and requires that the individual swear that he or she qualifies (based on the honor system) for the extended, special enrollment period.
The regulation, though a giant stride toward helping victims of domestic violence to acquire health insurance without having to contact their abusive spouse, still does not have a solution for victims of domestic violence who fled from their home less than six months ago.
If you are a victim of domestic violence and have been considering a separation or divorce from your abusive spouse, please contact an experienced Naperville family law attorney who will be able to provide guidance through this difficult time and legal solutions that may apply to your current situation.