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Government subsidy or tax credit? What’s the difference?
If you are eligible for a subsidy to help pay for your healthcare premium, the government pays that amount to the insurer and you pay the difference.
If you are eligible for a healthcare tax credit, it means that you have paid the total healthcare premium to the insurer yourself and will then be able to deduct the tax credit later when you file your income tax return for that year.
In short, with a subsidy you pay less out of your pocket; and with a tax credit you pay the full amount of the premium.
Obamacare uses subsidies, and Trumpcare uses tax credits.
Which would you prefer, a subsidy or a tax credit?
David L. Faust
Selinsgrove