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Does the tax benefit expand beyond the extended adult coverage requirement?

Yes. The Patient Protection and Affordable Care Act (PPACA) requires plans and insurance coverage providers that offer dependent child coverage to make the coverage available until a child reaches the age of 26. However, some employers may decide to continue coverage beyond the child's 26th birthday. In that case, under the PPACA the value of the employer-provided health coverage is excluded from the employee's income for the entire taxable year in which the child turns 26. Thus, if a child turns 26 in March but stays on the plan through December 31st (the end of most people's taxable year), all health benefits provided that year are excluded for income tax purposes.

The exclusion applies to any coverage that is provided to an adult child from March 30, 2010, through the end of the taxable year in which the child turns 26. This expanded health care tax benefit applies to various workplace and retiree health plans. It also applies to self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.