I know that the new healthcare law is still under discussion in the House. However, I?m trying to get an idea of what might happen as far as the Tax Credits available to someone over age 55. As an example: currently, a self employed person has a net income of about $17,000 - $19,000. I am told that the tax is about $1000 income tax plus $2700 on Self Employment tax for a total tax due of $3700 (all very round numbers). Currently, the person is enrolled in the Healthcare.gov exchange and receives a subsidy of about $3000 a year.
I hear that the current legislation being considered would provide a tax credit of $3000 for a person over 55 which would be applied against health insurance premiums. My question is: What would be the most likely scenario on how the tax credit would be applied? (A.) Would be applied to just the income tax ($1000) or (B.) would be applied to the total tax due ($3700)? I Know your answer will just be SWAG estimate but would like to get your opinion on what is the most likely scenario: (A) or (B).