Author Topic: Effect on Obamacare subsidies in a year where new family member is added  (Read 1270 times)


  • Stubble
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  • Posts: 125
  • Location: New Orleans, LA
I haven't been able to find an answer on the web for this. So this question is for forum members with more experience with Obamacare than I've had (so far on my 7th month using the marketplace for my health insurance), particularly with income levels necessary to receive cost-sharing benefits.

I have some mutual funds that I want to sell this year (or as soon as possible) to convert to index funds. While it's my goal to sell just enough to keep me in the 15% tax bracket (and thus pay 0 on long term gains) I'm also being mindful of the effect such transfers could have on my healthcare subsidies.

My wife is due with our first in October and I'll be attempting to keep our income below 200% of the federal poverty level, which would be $32,040 for 2 people. Would the addition to the family be effective beginning in the month of birth or does it extend to the calendar year (thereby meaning I only need to keep income below $40,320 for the year of 2016)? Does that question make sense?


  • Walrus Stache
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  • Posts: 7388
  • Senior Mustachian
It appears that your family size for the purpose of calculating the advance premium tax credits is the same as the number of exemptions you list at the beginning of your 1040. So if you have a baby on December 31st, 2016, you get the full exemption and child tax credit for 2016 for that child. It appears your FPL status for the advance premium tax credit also is calculated based on that child being in your household that year, without any prorating. But you should double check. The instructions for the relevant Form 8962 should give you the answer. You can walk through filling out the form and see what it tells you.