Tejal Somvanshi
More than 950,000 Americans enrolled in Affordable Care Act marketplace plans are receiving $500 payments from the U.S. Treasury. Payments began going out on September 30 and are being delivered as paper checks or direct deposits, along with a letter signed by President Trump. Here is what you need to know before you cash or deposit yours.
What the checks are and who gets one
The Trump administration announced the payments on September 10, describing them as refunds to ACA enrollees who the administration says were overcharged. The administration says the money comes from surplus funds associated with the federally operated ACA exchanges.
Roughly 950,000 people qualify. To receive a payment automatically, you must have bought health insurance through HealthCare.gov, paid your full monthly premium without receiving a federal premium tax credit, and live in one of the 30 states that use the federal marketplace. The administration says primary recipients are people earning above 400% of the federal poverty level — roughly $63,000 a year for an individual. No application is required. The Treasury is issuing payments based on existing enrollment records.
Payments are being sent as paper checks or direct deposits. Some families with more than one qualifying household member will receive multiple $500 payments.
What to do if you receive one
If you receive a $500 payment that appears to be part of the ACA refund program, verify the sender and accompanying information before depositing it. The payment is being distributed based on government enrollment records, so verify it matches your account details. The IRS has not published guidance on how these payments should be treated for federal tax purposes. If you have questions about your specific tax situation, consult a tax professional or wait for IRS guidance.
The tax question most news coverage skipped
What most reporting hasn't addressed: the taxability question. Whether the $500 counts as taxable income, or interacts with ACA premium tax credit reconciliation, depends on individual circumstances and has not yet been addressed by IRS guidance. Save any documentation that arrives with your payment. Flag the amount for your tax preparer rather than assuming it is non-taxable.
Frequently Asked Questions
Who is eligible for the Trump $500 ACA refund check?
Eligibility is automatic for approximately 950,000 people who bought ACA coverage through HealthCare.gov, paid full premiums without federal premium tax credits, and live in one of the 30 federally facilitated marketplace states. The administration says primary recipients are people above 400% of the federal poverty level. No application is required.
Are the $500 ACA checks taxable income?
The IRS has not yet published guidance specific to this program. Keep any documentation that arrives with your payment and ask a tax professional about your individual situation before assuming a tax treatment.
Do I need to apply to receive the $500 healthcare check?
No. If you qualify, the payment is issued automatically based on government enrollment records. Payments began going out on September 30.
Payments are being delivered through October to addresses and accounts on file with the federal exchange.
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