Premium tax credit Puns

For example, I currently enrolled in a plan that is 39$/month after a 294$ tax credit, assuming my income for this year will be around 13,000$.

Therefore, the cost monthly for the insurance before my tax credit  is applied is 333$.

My income is inconsistent dependent on how much I work as I am part-time.

Now, if I get a better paying job, will I have to pay up to the 333$ ceiling if I reach a certain threshold?

I am hoping that I can simply cancel (extremely doubtful) my insurance monthly in the event that I work more hours at my part time job or if I find a better paying job .

When signing up for 2021 medical insurance last year, I estimated my 2021 income as $25,000 (100% of this from realized gains in a stock portfolio), which gave my a fairly generous premium tax credit as well as access to a plan with a very low deductible and out of pocket max.

Well, my 2021 realized gains actually ended up being around -$20,000 which means that I basically had negative income for the year. I know that, if your income is less than 100% FPL, you get no premium tax credit or reduced deductible/out-of-pocket maximums which makes me worry that I will be required to pay back 100% of the amount I received from premium tax credits throughout the year + any other penalty from that arises from having used a plan with a very low deductible/out-of-pocket maximum (I'm also in a state that has not expanded Medicaid so, in my state, my income "change" wouldn't put me in an income bracket that's covered by Medicaid as I'm not pregnant, disabled, a child, etc.).

Does anyone know how something like this would play out? Will I be required to pay a big fat penalty because my yearly income ended up being far too low to warrant me getting a premium tax credit and reduced deductible/out-of-pocket maximums?

Thanks

Hi, i got my current insurance through healthcare.gov marketplace a year or so ago, when looking through it today I noticed im eligible for a tax credit on the plans now.

My question is, is it possible to add this tax credit onto my current insurance plan? Or do i have to take out a new policy through the marketplace

I put our total household income into a calculator, and it's showing that we would qualify for a premium tax credit if we both have insurance, but my insurance is in FL and hers would be in CO. Is that ok or will we get penalized somehow during tax season?

The healthcare.gov application I filled out is wanting me to apply for FL coverage for my wife, (which I don't want), and I can't figure out how to change the application because it has already been 'submitted'.

On the Colorado marketplace, I'm telling the application that I only want my wife applying to health insurance, so it's telling me she doesn't qualify for any tax credits.

How do I untangle this mess? I want coverage for myself in FL, and coverage for my wife in CO, and I'd like to split the premium tax credit between both of our month premiums.

Hi! Can anyone please explain to me what premium tax credit is? Do I have to pay that amount back to IRS when I will file my tax ? This is my first time getting a health insurance through marketplace and things are confusing. Thanks

Hello,

I'm new here and need some help around tax credits and health insurance premiums.

I'm close to 70, widowed and live in WA. I have always been eligible for tax credits to help with health insurance premiums (I go thru wa health plan finder via an agent). I was notified that I don't qualify for tax credits starting next month, and my payments will be $800 higher, which i cant afford. My living or income situation has not changed between november and december this year. I was directed to an appeals process, but I think I need some legal help.

Any advice on what kind of lawyer/organization/website I need to contact? If someone has a reference, that would help too. I appreciate any assistance I can get. God bless. Thank you.

adding: My agent seems to think that they don't have access to my tax return to ascertain income eligibility since i filed an extension in 2020, but I can't verify that other than get confirmation that I have given them permission.

---

P.S. I don't qualify for medicare, am a permanent resident for the past 5 yrs and 2020 reported income between 100% and 200% of federal poverty line.

Tell me that this country isn't as dumb as it's seeming.

Not sure if this the best place for this but I hope I didn't shoot myself in the foot here. Two issues with Health care and taxes:

1. I'm a Realtor who is new to the business and went full time at the beginning of this year (1099)

I used a health care provided from the market place and have been paying 0$ every month with the Premium Tax Credit. I forgot to update my earnings as I got more closings and just expected to pay all my tax at the end of the year.

I called up today to find a better health plan as my current renewal would put me at 77$ a month with my tax credit. The kind lady told me I actually don't have any tax credit for the year and I potentially would have to pay the full monthly premiums I was getting for 0$ a month (over 5k). I hope she meant I had no premium tax credit as from her end (and since I hadn't reported any earnings yet), they can't verify I earned anything yet and that I am not freeloading.

2. I also earned about 7,500-10,000$ more than I estimated when guessing how much I'll earn to determine my upcoming year tax credit. Still for the year and after deductions, my net pay is under 40k. I know there is an amount, that if I make over it, I will automatically have to pay back the full amount. I'm just not sure what that is.

Does anyone know about this stuff? Do you think I will have to repay the full premium tax credit for the whole year?

Well, I logged into my IRS account as I do every Monday morning to check my account and saw some good news…

They have made an adjustment to the excess APTC on my account, removing the $1,350 of overpayment due to unemployment income. Brought my account back into the green, no adjustment made to unemployment as of yet so we will see how long that takes. Getting some money kicked back as well, so yay!

Wondering if anyone else has has this specific adjustment before they made the unemployment adjustment?

This is an element of the American Rescue Plan.

For Premium Tax Credit purposes, if a taxpayer qualified for unemployment benefits at any time in 2021 then their MAGI for PTC purposes will be deemed 133% of the Federal Poverty Level, no matter what their actual income. This is a great opportunity to harvest gains with no impact on their medical premiums, which in most cases will be free no matter what the income winds up.

See: https://www.healthaffairs.org/do/10.1377/hblog20210311.725837/full/

See legislative text here: Sect 9663 in https://www.congress.gov/117/bills/hr1319/BILLS-117hr1319enr.pdf, page 180.

Comments?

In 2021 i was given about a 50% discount. Income at about $1600/mo family of 3. When I went to apply this year I am not offered any discount and have not changed a thing??? Happen to anyone else?

So I have spoken with an insurance broken in depth (but was more concerned about the insurance and not the payment part) and have received options for healthcare through the healthcare.gov. I am able to get insurance through my employer. My husband is not offered insurance through his employer. He’s eligible for a tax credit that’s applied to out household- just making sure I understand this correctly? And this tax credit we will pay back when we file our taxes?

During Jan-May 2020 I collected Premium Tax Credits for healthcare insurance on the marketplace which I had to pay back because of making more than the income limits by year’s end.

I wouldn’t imagine this would be holding up my federal unemployment tax refund but wanted to ask the group for clarity.

I’m hoping the refund will come soon but the delay is making me skeptical.

Can anyone share thoughts on any related impacts?

PS. I received my UI refund from my state back in June but still everyday I check my federal tax transcript to continue to be disappointed with nothing being updated.

Edit: Verified that I paid back 100% of the APTC’s per my return.

Edit: I also have small Capital Gains and I’ve heard others with capital gains have a similar issue.

Link to the article: https://www.irs.gov/newsroom/irs-suspends-requirement-to-repay-excess-advance-payments-of-the-2020-premium-tax-credit-those-claiming-net-premium-tax-credit-must-file-form-8962

Details:

The Internal Revenue Service announced today that taxpayers with excess APTC for 2020 are not required to file Form 8962, Premium Tax Credit, or report an excess advance Premium Tax Credit repayment on their 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, when they file.

Eligible taxpayers may claim a PTC for health insurance coverage in a qualified health plan purchased through a Health Insurance Marketplace. Taxpayers use Form 8962, Premium Tax Credit to figure the amount of their PTC and reconcile it with their APTC. This computation lets taxpayers know whether they must increase their tax liability by all or a portion of their excess APTC, called an excess advance Premium Tax Credit repayment, or may claim a net PTC.

Taxpayers can check with their tax professional or use tax software to figure the amount of allowable PTC and reconcile it with APTC received using the information from Form 1095-A, Health Insurance Marketplace Statement.

The process remains unchanged for taxpayers claiming a net PTC for 2020. They must file Form 8962 when they file their 2020 tax return. See the Instructions for Form 8962 for more information. Taxpayers claiming a net PTC should respond to an IRS notice asking for more information to finish processing their tax return.

Taxpayers who have already filed their 2020 tax return and who have excess APTC for 2020 do not need to file an amended tax return or contact the IRS. The IRS will reduce the excess APTC repayment amount to zero with no further action needed by the taxpayer. The IRS will reimburse people who have already repaid any excess advance Premium Tax Credit on their 2020 tax return. Taxpayers who received a letter about a missing Form 8962 should disregard the letter if they have excess APTC for 2020. The IRS will process tax returns without Form 8962 for tax year 2020 by reducing the excess advance premium tax credit repayment amount to zero.

Again, IRS is taking steps to reimburse people who filed Form 8962, reported, and paid an excess advance Premium Tax Credit repayment amount with their 2020 tax return before the recent legislative changes were made. Taxpayers in this situation should not file an amended return solely to get a refund of this amount. The IRS will provide more details on IRS.gov.

I know and have confirmed with the IRS that I overpaid $1350 APTC when doing my taxes. I filed before the American Rescue Plan came about.

Per their website: https://www.irs.gov/newsroom/irs-suspends-requirement-to-repay-excess-advance-payments-of-the-2020-premium-tax-credit-those-claiming-net-premium-tax-credit-must-file-form-8962

"The IRS is taking steps to reimburse taxpayers who filed Form 8962, reported, and paid an excess advance Premium Tax Credit repayment amount with their 2020 tax return before the recent changes made by the American Rescue Plan Act of 2021."

It's now mid August and nothing yet. This is a lot of money I could really use right now. IRS national line told me last week just to wait... How long?? Any way I can expedite this??

So...where to begin.

My wife and I were married in 2019, so fast forward to 2020 and we file our 2019 taxes and get a nice hefty refund. We were in serious need of the money due to the pandemic, but the refund just never showed up. Checked the "Where's my refund" tool and it shows we're under audit. We have no idea why, so we wait for months and finally get a letter showing that we owe ~$20k because of the premium tax credit in addition to an $1800 inaccurate filing fee. We come to find out that her mother added her to their marketplace insurance since she was under 26, but they didn't tell us about it. I'm not sure why she did it, but she did it and now it's ruining our lives.

Once we filed our return and my wife's social flagged for the premium tax credit for insurance they wanted a 1095-A and form 8962. My insurance is through my employer, so all we got was a 1095-C.
We had to get the 1095-A from her parents so that we could provide the required paperwork. After multiple phone calls to the IRS I was finally explained to fill out form 8962 showing 0% responsibility to us and 100% responsibility to my in-laws. I faxed it in twice and kept getting letters saying that it was required and not received. Finally in December I mailed in the required forms via certified mail with a signature requirement, so I know factually they received it.

Fast forward to today and I received letter 692-M stating that the original decision stands, and enclosed was form 4549 and a very lengthy and confusing step-by-step of how they reached their amount. Additionally form 886-A explains:

"We previously requested Form 8962 but did receive it but it's not matching our records"

"Form 8962, Premium Tax Credit (PTC), is required to reconcile the advance payments of the premium tax credit made for you. We created the document for you, and it is included in this packet. Line 5 indicates your income was 401% of the Federal Poverty Level. Your income exceeds the limit established for Federal Poverty Level of 400%. You do not meet the qualifications and must repay the full amount of Advanced Premium Tax Credit received."

I'm literally at my wit's end that our refund is being withheld and we owe several thousand dollars all because someone else put my wife on their insurance without out knowledge. PLEASE, tell me someone knows how to get this fixed?

Hi I’ll be residing in Ontario full time for my 3-year PhD program. While I’m insurance in Canada under Canadian insurance id like to keep my insurance in the USA as well to cover covid testing (mandatory for border crossing) and any medical services I opt to keep in the USA if wait times in Canada are too long. Under my current plan in Michigan I qualify for the 0-dollar premium with full tax credit.

Is there a penalty for keeping USA insurance while living in Canada? I don’t know of any but I want to ensure I don’t owe all the tax credit back on premiums. It would sink me financially. For reference, my mail, permanent residence, license, and vehicle registration will remain tied to Michigan. I’m just renting in Canada and earning income there/paying taxes.

Tl;dr permanent residence in USA (MI), renting/residing in Ontario for PhD. Have Canadian health insurance but want to keep USA insurance to stay covered in both countries and want to make sure the tax credits I get on premiums won’t be a penalty when I file next year.

It has been almost an entire month since this bill was signed and ZERO guidance on the PTC repayment. This is ridiculous. I must have a dozen returns waiting on only this. One thought she was finally done since she also had unemployment. Nope. Sorry for the rant, am on hold with Tax Prac, go about your day.

What is the income cut off for receiving advanced tax credits for insurance premiums in 2021? in 2020 it was 4x the poverty rate of $12,490 or $49,960 was the cutoff for the 48 states. What is it for 2021? It's crazy that it isn’t clearly posted somewhere.

Part of the American Rescue Plan suspended the requirement for taxpayers to increase their tax liability for excess advance payments of the Premium Tax Credit. My refunded excess just hit my account today, appearing as a Federal Tax Refund.

Just wanted to post so more people were aware. Hope anyone who is owed this money gets it soon as well.

More info from the IRS can be found here.

TL;DR: The American Rescue Plan, passed in 2021, may have accidentally, retroactively, caused me to not make enough in 2020 to qualify for Premium Tax Credit. Where do I go from here? Is there anything I can do? Or am I just screwed?

I purchase my insurance through the Marketplace/Healthcare.gov. Rather than take the subsidies/Advance Premium Tax Credit I normally qualify for and have it reduce my monthly premiums, I opt to take none of it in advance, and get the money back on my taxes.

In 2020, after COVID hit, my workplace closed for a bit, but I did qualify for unemployment. My Modified Adjusted Gross Income, the number used to calculate whether someone qualifies for the Premium Tax Credit ,met the minimum to qualify for 2020. The information available in 2020, including the information on Healthcare.gov, said unemployment was considered taxable income, so it counted toward my MAGI. The information on Healthcare.gov still listed unemployment pay as being included in MAGI when I did my taxes in 05/2021 so I thought I was fine.

The complication is the American Rescue Plan, which was passed in 2021. Among other things, it waived taxes on up to $10,200 in unemployment. The problem, I now understand, is this caused me, retroactively, to not meet the income requirements needed in order to qualify for the Premium Tax Credit in 2020. There was a provision in the ARP that said those who took the Advanced Premium Tax Credit would not have to pay it back if they no longer qualified, however, I did not take the APTC so this provision did not apply in my situation.

I filed my taxes in 05/2021 using a common tax filing website. When I was answering the questions before filing, it questioned whether I qualified to get the Premium Tax Credit, but I thought that this was just a glitch, some software issue that hadn’t been updated to reflect people specific situation.There was some question I answered yes to that then showed me receiving the PTC so I thought everything was going to be fine. I (incorrectly it seems) assumed the IRS was still ironing out the details, and that though it might take a while, I would receive my refund including the PTC.

I have now received a letter in the mail from the IRS and it is asking for more information to process my return, because it says I reported making less than the minimum to qualify for the Premium Tax Credit. I did some digging and looked at my taxes again and the Modified Adjusted Gross Income listed on my filed tax r

I am in a situation where I began the year on a subsidized plan (tax credit was $315 a month), but was later offered insurance through my employer, but continued my marketplace plan for 6 months. After reading through the american rescue plan act of 2021, it seems like it may not have to be repaid for tax year 2021??? I am unsure by a lot of the wording. Will I have to repay premium tax credit I was ineligible for tax year 2021? Please let me know of your thoughts.

I’m trying to help a family member who is currently 63 purchase health insurance. They are not employed, and recently lost their spouse. They do not have health insurance options through their late spouse’s previous employer, so there no extended coverage options. They must buy their own health insurance, and I assume the Healthcare Marketplace is the best place to start.

I did a search on the Healthcare Marketplace for our state (Georgia) and found that it would cost them $789/mo. They are eligible for a premium tax credit of $981 per month based on their income level. Does this mean that they could effectively get the insurance for free? If so, what are the rules around obtaining the health insurance and the premium tax credit in their situation?

I think I qualify for a turbotax free file except for a $163 premium tax credit. TurboTax is requiring me to spend $120 to upgrade to deluxe.

Do I have any other options? I tried to use the IRS free file website but I don't think they screen for PTC.

UPDATE: I had to click the link for free file through the actual IRS website. Once I clicked that link it brought me to TurboTax and asked if I wanted to switch from deluxe to IRS free file. Once I did that it allowed me to file for free.

I want to be cautious and not get myself in tax trouble. Any advice or input would be enormously appreciated.

Edit: age 60 in Georgia

Hello,

I'm new here and need some help around tax credits and health insurance premiums.

I'm close to 70, widowed and live in WA. I have always been eligible for tax credits to help with health insurance premiums (I go thru wa health plan finder via an agent). I was notified that I don't qualify for tax credits starting next month, and my payments will be $800 higher, which i cant afford. My living or income situation has not changed between november and december this year. I was directed to an appeals process, but I think I need some legal help.

Any advice on what kind of lawyer/organization/website I need to contact? If someone has a reference, that would help too. I appreciate any assistance I can get. God bless. Thank you.

adding: My agent seems to think that they don't have access to my tax return to ascertain income eligibility since i filed an extension in 2020, but I can't verify that other than get confirmation that I have given them permission.

---

P.S. I don't qualify for medicare, am a permanent resident for the past 5 yrs and 2020 reported income between 100% and 200% of federal poverty line.

Hello,

I'm new here and need some help around tax credits and health insurance premiums.

I'm close to 70, widowed and live in WA. I have always been eligible for tax credits to help with health insurance premiums (I go thru wa health plan finder via an agent). I was notified that I don't qualify for tax credits starting next month, and my payments will be $800 higher, which i cant afford. My living or income situation has not changed between november and december this year. I was directed to an appeals process, but I think I need some legal help.

Any advice on what kind of lawyer/organization/website I need to contact? If someone has a reference, that would help too. I appreciate any assistance I can get. God bless. Thank you.

adding: My agent seems to think that they don't have access to my tax return to ascertain income eligibility since i filed an extension in 2020, but I can't verify that other than get confirmation that I have given them permission.

---

P.S. I don't qualify for medicare, am a permanent resident for the past 5 yrs and 2020 reported income between 100% and 200% of federal poverty line.

Can I qualify for the premium tax credit on the marketplace if my employer already offers health insurance but only to full-time workers and I'm part-time?

Would paying back the premium tax credit be done during my normal tax return, where I can claim applicable deductions to reduce it, or is it a separate process from all of that?