Obamacare credits start, based on 2012 adjusted gross income.

I haven’t seen a lot about this in print, but it makes sense, right?

The Affordable Care Act requires everyone to be covered on January 1, 2014 (with exceptions). To the end of having that broad coverage, Affordable Health Benefit Exchanges are going to be set up in each state. The state can set it up, or the feds will do it for them.

Enrollment in these Exchanges begins in the fall of 2013.

Because premium credits are going to be necessary to make this new program work, those premium credits are going to be based off the best adjusted gross income that the government will have: a filed 2012 tax return. (The filing for 2013 won’t be generally available to that end until April 15, 2014, as a deadline. The Exchanges will already have been open for business for months by then.)

So if 2012 adjusted gross income is so critical, why aren’t the “tax planning” aspects of this being discussed? Especially, since there are only about 20 days left here in December?

To me, the two key income levels are those 100% and 400% of poverty levels that I’ve mentioned before. That wide band, which includes practically everyone in America, squarely puts you in the Exchange (if you don’t have other kinds of insurance like employer-provided, or Medicare, or Tricare from the military.)

In the Exchange, you get premium credits, and other possible benefits like cost-sharing credits as well.

Below 138% of the poverty level, you were supposed to benefit from Medicaid Expansion. But since this has been made voluntary in the Obamacare lawsuit, there is the odd situation—especially in a place like Pennsylvania, where you can have a very low income and not have made enough to qualify for the Exchange. Medicaid Expansion was supposed to cover up to 138%. The Exchange starts at 100%. So if you are less than 100% of federal poverty level, you may be out of luck.

It will be great when everything is up and running. But it’s a shame that “Obamacare Tax Planning” has not been part of the 2012 discussion . . .

[Update 6/19/13: What I’ve seen since this post, is that the model Obamacare application will also let you use either 2013 expected income OR 2014 expected income if that’s expected to be higher. Looks like the administration is trying to avoid a situation where there are hundreds of thousands of credit clawbacks.]