By now, the stimulus check and the child tax credit are possibly well-known knowledge. However, the latest stimulus law also includes other important tax breaks and updates regarding health insurance and medical care for the whole family.
The Changes In The Stimulus Law
For individuals with FSA health care, the limit for which contributions are tax-free has been increased and now stands at $2750. This is an increment of $50. The change came under the adjustments for annual inflation by the IRS. This means that more money can be deposited in the account without having to pay taxes for it.
There are also new medical expenses that have become tax-deductible. In the stimulus law passed in December, Congress has made more allowances for deductible expenses. The original plan was to cap expenses that are more than 10% of the AGI. Now, however, the medical expenses exceeding 7.5% are now deductible.
Usually, if an individual loses their job, insurance coverage can be bought through the former employer via the government-sponsored COBRA. It stands for Consolidated Omnibus Budget Reconciliation Act program. However, the person would have had to give the complete premium.
Under the new stimulus law, the federal treasury is going to pay the premium for COBRA in the period between 1st April and 30th September for fired employees as well as members of their family. However, the person must not have Medicare or quit voluntarily.
The new stimulus law has also modified and introduced new eligibility criteria for subsidies on health terms over the short term. Through Affordable Care, almost anyone who purchases their insurance is eligible for the discounts.
The new stimulus law has also introduced a special period for enrollment that extends till the middle of August. As such, people do not have to wait for six weeks as is usual.