Obamacare: separated, not divorced — how to estimate income

My wife and I separated in December 2013.  We are not divorced, but that is probably going to happen sometime in 2014.  I was on her health insurance, and will now need to buy it on my own.  What do I say for my income when I apply for a subsidy?  Do I have to use our 2013 joint income, even though in 2014, I’ll only have my own? 

In Limbo

Dear In Limbo,

For your health insurance subsidy, the important income figure is your estimate for 2014 – not what you earned in previous years.  In your case, your 2013 income will be very different from your 2014 income.  That, mixed with your separated-not-divorced status makes it a bit more complicated.

The IRS says you are married for the whole year if you are separated but you have not obtained a final decree of divorce or separate maintenance by the last day of your tax year. An interlocutory decree is not a final decree.

On the other hand, if you have a divorce decree any time in 2014 (even December 31), you are considered divorced for the whole year.  You could also get a decree of separate maintenance, which would allow you to file as a single individual.

If you are confident that you will divorce in 2014, then you can reasonably use your own (single) income as your estimate for your exchange subsidies.  If 2014 starts to go by and you are not yet divorced, then you might want to at least get a separate maintenance decree.

You would be well served to consult an attorney or a financial planner for advice on this and other matters.

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Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.