Federal Unemployment caused marketplace repayment

Collapse
X
 
  • Time
  • Show
Clear All
new posts
  • MAJ
    Senior Member
    • Oct 2008
    • 382

    #1

    Federal Unemployment caused marketplace repayment

    Clients who utilized the Marketplace for health insurance in 2020 are in for a rude awakening this year as is one of my clients (so far).
    Her salary had been reduced due to COVID-19. She was already in the marketplace prior to 2020 (she enrolled EOY 2019).
    She collected unemployment due to lost hours.
    When she signed up for marketplace she did not anticipate COVID-19 and extra Federal UnEnjoyment. Now the unemployment income has increased her overall income knocking her out of eligibility for the marketplace insurance.
    As such, she is now required to repay $1,895 in coverage assistance.

    I doubt there is, but, is there anything to be done?

    Matthew Jones
    Tax Preparation
    Computer Consultant


    Tax Season is here!
    Make sure everything is working, extra ink or toner is available, Advil in top drawer!

  • BP.
    Senior Member
    • Oct 2005
    • 1750

    #2
    Deductible IRA?

    Comment

    • TaxGuyBill
      Senior Member
      • Oct 2013
      • 2319

      #3
      As BP mentioned, contributing to a Traditional IRA is the most common method. If you can get her MAGI under 400% of the Federal Poverty Level, any repayment of the credit would at least be limited if she is filing as "Single".

      Other possible options: Contribute to a HSA, if the client qualifies. If the client has a business, make sure you are using Bonus depreciation, De Minimis election or ยง179, and an employer based retirement plan could be another option.


      You may want to let the client know that the Marketplace tells her that if there is a change of income or family size, she is supposed to report that to the Marketplace ASAP.

      Comment

      • DoubleO
        Member
        • Feb 2020
        • 81

        #4
        Wasn't legislation introduced last week that would keep $10,200 of unemployment from being taxable? Don't know how that would play into 8962 adjusted gross income if it passes. I.e., would it have to be added in like nontaxable SS.

        Comment

        • Anarchrist
          Senior Member
          • Oct 2006
          • 351

          #5
          Wasn't legislation introduced last week that would keep $10,200 of unemployment from being taxable?
          Looks like it was introduced last September. Hasn't seemed to go anywhere since then so I wouldn't put much hope in it
          https://www.congress.gov/bill/116th-...bill/4713/text



          "Taxation is the price we pay for failing to build a civilized society." ~ Mark Skousen

          Comment

          • New York Enrolled Agent
            Senior Member
            • Nov 2006
            • 1530

            #6
            Originally posted by Anarchrist
            Looks like it was introduced last September. Hasn't seemed to go anywhere since then so I wouldn't put much hope in it
            https://www.congress.gov/bill/116th-...bill/4713/text
            That bill was introduced in the 116th Congress. It automatically died on January 3rd when the 117th Congress was sworn in.

            Comment

            • kathyc2
              Senior Member
              • Feb 2015
              • 1944

              #7
              Originally posted by MAJ
              Clients who utilized the Marketplace for health insurance in 2020 are in for a rude awakening this year as is one of my clients (so far).
              Her salary had been reduced due to COVID-19. She was already in the marketplace prior to 2020 (she enrolled EOY 2019).
              She collected unemployment due to lost hours.
              When she signed up for marketplace she did not anticipate COVID-19 and extra Federal UnEnjoyment. Now the unemployment income has increased her overall income knocking her out of eligibility for the marketplace insurance.
              As such, she is now required to repay $1,895 in coverage assistance.

              I doubt there is, but, is there anything to be done?
              Income does not knock her out of eligibility of marketplace insurance. You can have the insurance regardless of income. The federal subsidies are eliminated after 400% FPL.

              If I'm understanding you correctly, she made more on unemployment than working? Now she or you are upset because one gov't program takes away benefit money from another gov't program? Geesh.

              Comment

              • Melesko
                Junior Member
                • Feb 2021
                • 2

                #8
                I don't get the impressions that MAJ is upset for not getting benefit money from the gov't. This about getting the tax treatment correctly and doing a good job for his client.

                Comment

                • TAXNJ
                  Senior Member
                  • Jan 2007
                  • 2106

                  #9
                  Originally posted by Melesko
                  I don't get the impressions that MAJ is upset for not getting benefit money from the gov't. This about getting the tax treatment correctly and doing a good job for his client.
                  Correct. Some would say is upset for not getting benefit (Their money) money from the gov't and “not is upset for not getting benefit money from the gov't”.

                  One can always tell who is a good “client” Tax Advisor (looking out legally for the client) by your comment “This about getting the tax treatment correctly and doing a good job for his client.
                  Always cite your source for support to defend your opinion

                  Comment

                  • kathyc2
                    Senior Member
                    • Feb 2015
                    • 1944

                    #10
                    Hey Jersey, you may need to see a Tax Attorney about that.

                    Comment

                    • Dude
                      Senior Member
                      • Dec 2018
                      • 360

                      #11
                      Originally posted by Melesko
                      I don't get the impressions that MAJ is upset for not getting benefit money from the gov't. This about getting the tax treatment correctly and doing a good job for his client.
                      Then maybe a heads up earlier in the year would have served the client better.
                      "Dude, you are correct" Rapid Robert

                      Comment

                      • TAXNJ
                        Senior Member
                        • Jan 2007
                        • 2106

                        #12
                        Originally posted by Dude

                        Then maybe a heads up earlier in the year would have served the client better.
                        Think that was reply poster Melesko’s point and/or what maybe available to help the client after the fact.

                        Melesko’s has a good philosophy “This about getting the tax treatment correctly and doing a good job for his client.”
                        Always cite your source for support to defend your opinion

                        Comment

                        • Dude
                          Senior Member
                          • Dec 2018
                          • 360

                          #13
                          Originally posted by TAXNJ

                          Think that was reply poster Melesko’s point and/or what maybe available to help the client after the fact.

                          Melesko’s has a good philosophy “This about getting the tax treatment correctly and doing a good job for his client.”

                          It's not after the fact if it happens again this year. Unless the the words "the first time" are added after "correctly" it is assumed you mean "eventually".
                          "Dude, you are correct" Rapid Robert

                          Comment

                          • TAXNJ
                            Senior Member
                            • Jan 2007
                            • 2106

                            #14
                            Originally posted by Dude


                            It's not after the fact if it happens again this year. Unless the the words "the first time" are added after "correctly" it is assumed you mean "eventually".
                            Whatever you say that makes you feel good and/or important since you use the word “assume”.

                            No one said or implied “It's not after the fact if it happens again this year”. So you can assume all you want.

                            So, again, Melesko’s has a good philosophy “This about getting the tax treatment correctly and doing a good job for his client.
                            Last edited by TAXNJ; 02-20-2021, 09:55 AM.
                            Always cite your source for support to defend your opinion

                            Comment

                            • Dude
                              Senior Member
                              • Dec 2018
                              • 360

                              #15
                              Originally posted by TAXNJ

                              Whatever you say that makes you feel good and/or important since you use the word “assume”.

                              No one said or implied “It's not after the fact if it happens again this year”. So you can assume all you want.

                              So, again, Melesko’s has a good philosophy “This about getting the tax treatment correctly and doing a good job for his client.
                              I knew you would "eventually" agree
                              "Dude, you are correct" Rapid Robert

                              Comment

                              Working...