# Plain Language Summary: Dependent Income Exclusion Act of 2024

This bill changes how the government calculates whether families qualify for health insurance subsidies under the Affordable Care Act. Right now, when the government decides if you're eligible for help paying your health insurance premiums, it counts all the income in your household—including money your kids earn from jobs. This bill says that for certain young dependents, their work income shouldn't count against you when determining if you qualify for those subsidies.

Specifically, the bill excludes income from dependents who are under 18 years old, or under 24 if they're in school, job training, or an apprenticeship program. So if your teenager works at a part-time job and earns $5,000 a year, that money won't be counted as part of your household income when the government figures out your eligibility for premium tax credits. However, there's a limit: if all your dependents' combined income exceeds 15 percent of your own income, the excess amount still counts. For example, if you earn $50,000, your dependents' income over $7,500 would still be counted.

There's an additional protection for families living in states that haven't expanded Medicaid coverage. In those states, the bill ensures that excluding dependent income won't push your household income below the poverty line, which could make you ineligible for subsidies. The changes take effect for tax years starting after the bill becomes law, meaning families could see immediate benefits when applying for health insurance help in the next enrollment period.

Dependent Income Exclusion Act of 2024

Dependent Income Exclusion Act of 2024This bill excludes the wages and net earnings from self-employment of a dependent of a taxpayer&nbsp;from the calculation of total household income for purposes of determining eligibility for and the amount of the refundable premium tax credit, subject to limitations.Under current law, eligible taxpayers may be able to claim the premium tax credit, which applies toward the cost of obtaining health insurance through health insurance exchanges. To be eligible for the credit, a taxpayer’s household income must meet or exceed 100% of the federal poverty level (FPL). For tax years before 2021 and after 2025, taxpayers must have a household income that meets or exceeds 100% but is less than 400% of the FPL to be eligible for the tax credit.Further, under current law, the calculation of the premium tax credit is based, in part, on taxpayers’ household income such that taxpayers with lower household incomes are eligible for a higher premium tax credit.The bill excludes from household income the wages and net earnings from self-employment of a dependent of the taxpayer who (1) is under 18 years old; or (2) is under 24 years old and is, during&nbsp;any five calendar months of the year, a full- or part-time student in an educational organization (excluding for-profit educational institutions), is in an apprentice program, or is participating in a job training program.The amount that may be excluded is limited to 15% of the taxpayer’s modified adjusted gross income.&nbsp;