premium tax credit

[arlo]

If you get your health insurance thru the market place for 2019 are you still liable to pay back the advanced payments of PTC for exceeding the 400 % poverty level

[kathyc2]

Why would it not be repaid? Actually, it client believes 2019 income will increase by this much they are supposed to notify healthcare.gov so premium credit will stop.

[JBP]

Yes. You could consider looking at making traditional IRA or HSA contributions to reduce income below the 400% level.

[arlo]

These clients were in trouble last year and had to take out an IRA to get their income under 400%. This year they had 20,000 more income than last year now have to pay $8500.00 back. An IRA will not save them this year. You would think that the market place people would ask for last years tax return to see they were in trouble last year and ask what their income was going to be in 2018. That must not have happened. This is not the first time that I have seen this happen. It can ruin peoples lives. Now my clients will be indebted to the IRS for many years because the market place people did not do there job.

[kathyc2]

T You would think that the market place people would ask for last years tax return to see they were in trouble last year and ask what their income was going to be in 2018. That must not have happened. This is not the first time that I have seen this happen. It can ruin peoples lives. Now my clients will be indebted to the IRS for many years because the market place people did not do there job.

They would have signed up for 2018 insurance in late 2017. Their 2017 return would not have been filed yet. When signing up people need to enter their projected income for the coverage year, or verify the amounts pulled in from last year. When your clients filed 2017 return, they knew they needed to contribute to IRA to avoid full payment of advances received. Did they not know their income for 2018 would be higher? Why would it not be their responsibility to understand the consequences of the higher income rather than blaming someone else?

[arlo]

Iam wondering if the spouse who is under the market place coverage can file as Married filing separately. I tried this and it seems to work. She would only have to pay back $1500.00. Am I missing something. The husband has his own insurance through his union. I have read pub 5157 and cannot find where this cannot be done. Any info would be helpfull

[Lion]

The Marketplace warns people to contact them when they find their income increasing or a life event happens (child moves in with ex or lost job or raise or marriage...). I warn people to contact the Marketplace.