ACA exception 8% of AGI Marketplace

[spanel]

So we all should know by now that if your client doesn't have health insurance, one way to possible get out of the penalty is if the Lowest Bronze plan in their area is over 8% of their AGI.

All is well except for where on earth does one get this info?!? Speakers at local seminars where confident... "this will be built into your software"....

WRONG

Taxslayer Pro does not include this calculation.

Where do we find this info at?!?!?

Thanks!

Chris

[TaxGuyBill]

I would think it would be easy to have a database for the software to access, but according to Form 8965 Instructions:

For information on the lowest cost bronze plan you could have purchased for your tax household, visit www.healthcare.gov or contact the Marketplace serving your area.

http://www.irs.gov/pub/irs-dft/i8965--dft.pdf#page=10

It's also possible that when IRS Publication 974 comes out, it would be there. However, that would require the Publication to be VERY large, so I really doubt it will be there.


If they are eligible for employer insurance, they need to find out the lowest cost employer insurance for both self-only plans and family plans.


Also, there are TWO different 8% exemptions (code "A" and code "G").

[David1980]

I agree with TaxGuyBill. If I've got anyone who neglected insurance and they might qualify for that exemption I'll tell them to go get the number and let them do the leg work on that one. Given all the variables (ages, smoking, number of dependents, number of dependents that are children, state, ...) I don't think a software database would be practical. Perhaps if they gave a safe harbor national average option or something like that the software could do with less.

Also, "is over 8% of their AGI" - household income, so you might need the dependent's tax returns or income information if anyone else in the household has income.

On a related tangent, whenever I attend a seminar and the speaker answers a question with "Oh, your tax software will do that" I make a mental note never to attend anything from that speaker again. (Sadly, I sometimes "lose" these mental notes and then go "oh yeah, I remember this one now" when I accidentally end up in one of their sessions again.)

I mean, it's not like my software can make up random numbers for this and whatever source they have would be the same source I have. Even if my software did do it for me, I want to be able to verify my software did it correctly. Blind trust in software just isn't my thing. I mean, I think the real reason they give that answer is because they don't know but don't want to admit they don't know. I'd much rather they admit they don't know something. Perhaps they're worried that they're supposed to be the "expert" on what they're presenting and don't want to admit they don't know everything - but bad answers waste my time. Admit you don't know. If you feel obligated to, get contact information and promise to check up on it and get back to whoever asked the question.

[spanel]

Anyone figured out how to get that info on Healthcare.gov?

Chris

[TaxGuyBill]

Anyone figured out how to get that info on Healthcare.gov?

Chris

The taxpayers information (age, location, etc.) needs to be entered on Healthcare.gov (or the appropriate State website) to get all of the plans.

https://www.healthcare.gov/see-plans/

However, I still suspect the software MIGHT have access to a database. I know that early this year TurboTax (Intuit) had a online calculator that used such a database to calculate the lowest bronze price for taxpayers.

[arlo]

Bronze Plan

On the Shared Responsibility Payment Worksheet. (Tax Wise) They use $204 per month per person as
the Bronze Level Plan. Am I missing something or is this what is be discussed?

[David1980]

On the Shared Responsibility Payment Worksheet. (Tax Wise) They use $204 per month per person as
the Bronze Level Plan. Am I missing something or is this what is be discussed?

The $204 is the national average premium for a bronze level health plan and used in determining the maximum penalty amount. What's being discussed here is the exemption if the lowest cost bronze plan for a particular taxpayer is more than 8% of household income. You would use $204 in calculating the penalty. You would use whatever the actual cost for that specific taxpayer to purchase bronze level insurance is in determining if they qualify for the exemption. So two different things - penalty calculation vs. exemption.

[arlo]

ACA exception 8% of AGI Marketplace

You think you have it all figured out and then you find out you don't. I was using the $204. for both calculations.

[New York Enrolled Agent]

So we all should know by now that if your client doesn't have health insurance, one way to possible get out of the penalty is if the Lowest Bronze plan in their area is over 8% of their AGI.

I don't think it is actually that simple.

The coverage may be not affordable if the taxpayer's required contribution exceeds 8% of household income. Generally, the required contribution will reflect the insurance cost reduced by the available §36B premium tax credit that might be available to the taxpayer.

[spanel]

The taxpayers information (age, location, etc.) needs to be entered on Healthcare.gov (or the appropriate State website) to get all of the plans.

https://www.healthcare.gov/see-plans/

However, I still suspect the software MIGHT have access to a database. I know that early this year TurboTax (Intuit) had a online calculator that used such a database to calculate the lowest bronze price for taxpayers.

I'm still out on this... When I do this, it just shows the current rates. It does not give access to view rates for different years.

Anyone know of a database to pull all this info?

Thanks

Chris

[Lion]

And, we'll need to know the cost of the second lowest silver plan.... My software will do almost everything after I ask all the right questions. Not looking forward to someone who moved once or more during the year.

[TaxGuyBill]

My software will do almost everything after I ask all the right questions.

What software do you use?

[spanel]

And, we'll need to know the cost of the second lowest silver plan.... .

You got me... Why do you need that?

[spanel]

What software do you use?

I use both Taxslayer Pro & Ultra tax CS.... Neither have any calculations regarding any of the 8% exceptions.... All they have is a box to check if they qualify.

Chris

[Lion]

ProSystem fx.

One set of questions to determine if any additional forms and which additional forms. One percentage for exemptions from insurance and a different percentage to determine if qualify to use marketplace instead of employer and I forget which without looking at it percentage to reconcile if they received premium reductions. At least I won't have to do the math, most of the time! But, I do have to ask questions to understand where they are and, therefore, what I need to do on the tax return.

Most of my clients have employer-provided insurance. But, I'm sure I'll find some were reimbursed for their own private insurance. And, I'm already finding out those that had a part of the year without a job. Not looking forward to this tax season.