Subsidy Repay

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  • JoshinNC
    Senior Member
    • Feb 2006
    • 1180
    #1

    Subsidy Repay

    Client owes $10,000+ subsidy repay as income from LLC was wayyyyy more than they told Marketplace it would be. Based on the Trump EO and lack of any repeal vote in House, what are their options?

    I'm thinking either pay it, extend the return or file the return with the repayment on there and not pay it since it is "uncollectible" by IRS. Thoughts please.

    TIA
    Tags: aca credit repayment, obamacare
    • ATSMAN
      Senior Member
      • Jul 2013
      • 2415
      #2
      Originally posted by JoshinNC
      Client owes $10,000+ subsidy repay as income from LLC was wayyyyy more than they told Marketplace it would be. Based on the Trump EO and lack of any repeal vote in House, what are their options?

      I'm thinking either pay it, extend the return or file the return with the repayment on there and not pay it since it is "uncollectible" by IRS. Thoughts please.

      TIA
      Does he ever have a refund coming? I believe subsidy repayment is different than shared responsibility penalty. IRS will come after that if not paid.
      Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

        Comment

        • BP.
          Senior Member
          • Oct 2005
          • 1750
          #3
          Need to distinguish SRP (penalty), which this is not, from APTC (subsidy.)

            Comment

            • TaxGuyBill
              Senior Member
              • Oct 2013
              • 2321
              #4
              The repayment is completely collectible, and the Executive Order and the bill on Congress would not change that in any way. The taxpayer needs to make the repayment.

              Can the taxpayer contribute to retirement accounts (such as a SEP or IRA) to get their income below 400% of the Federal Poverty Level? If so, that will limit the repayment. Filing as Married Filing Separately can also get one or both returns under 400% of the FPL. Combining those two methods is a third option to get their income below 400% of the FPL.

                Comment

                • JoshinNC
                  Senior Member
                  • Feb 2006
                  • 1180
                  #5
                  MFs!!

                  Originally posted by TaxGuyBill
                  The repayment is completely collectible, and the Executive Order and the bill on Congress would not change that in any way. The taxpayer needs to make the repayment.

                  Can the taxpayer contribute to retirement accounts (such as a SEP or IRA) to get their income below 400% of the Federal Poverty Level? If so, that will limit the repayment. Filing as Married Filing Separately can also get one or both returns under 400% of the FPL. Combining those two methods is a third option to get their income below 400% of the FPL.
                  That cuts the repayment by 75%! Thank you!!

                    Comment

                    • TaxGuyBill
                      Senior Member
                      • Oct 2013
                      • 2321
                      #6
                      Originally posted by JoshinNC
                      That cuts the repayment by 75%! Thank you!!
                      Great! I'm glad I could help.

                        Comment

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