Forms 1095A & 8962-Deceased Taxpayer

[Taxed]

A client, in poor health, opted to use the Marketplace for health insurance. Estimating low income the subsidy was $7000+ on Form 1095A. The client passed away during the tax year, with Household Income per Form 1095A below any threshold. After the fact, an IRA was distributed resulting in a Form 1099R being issued. The result on Form 8962 was a Tax of $7000+ showing on the Form.

This result is obviously unfair, unjust and unethical...what is our remedy?

[Lion]

The IRS was distributed after your client's death?

[Rapid Robert]

"A client, in poor health, opted to use the Marketplace for health insurance"

Thank goodness for ACA, otherwise pre-existing conditions would have most likely made insurance impossible to obtain.

"a Tax of $7000+ ... unfair, unjust and unethical"

It was none of those four things. It is simply a bill for unpaid premiums for health insurance coverage the taxpayer signed up for and received.

[kathyc2]

After the fact, an IRA was distributed resulting in a Form 1099R being issued. The result on Form 8962 was a Tax of $7000+ showing on the Form.

After the fact meaning after death? If so, the 1099R should be to the beneficiary not the deceased.

[Taxed]

Forms 1095A & 8962: Taxpayer was in poor health, needed insurance and projected income to arrange the subsidy. During the year in question, Taxpayer passed away. Subsequent to passing away an IRA was distributed without a beneficiary named. The result of the IRA showed a much higher income for the year and the result on Form 8962 showed owing $7000+ even though the actual income (without the IRA) was below that projected for the insurance. How do we avoid repaying the insurance due to that?

[RWG1950]

Not sure I understand the facts of your comment.
For an IRA distribution to occur, normally the account holder (if alive) or the estate's personal representative (if made after death) is required
(by some fashion) to authorize the distribution. Are you saying the taxpayer authorized this immediately before dying - just hadn't
received the check until after death ? When you say subsequently distributed without a bene named, this implies the distribution was made after death
and was payable to the taxpayer's estate. I'm not well versed in the ACA or form 8962, but would such estate income affect the taxpayer's individual medical
insurance subsidy under the ACA ?

[TaxGuyBill]

As was noted above, if the IRA was distributed after death, it does not go on the 1040, so it would not affect the Premium Tax Credit. It would go on the Estate's 1041.