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Any danger to MAGI going over CSR threshold this year if signed up for Bronze in 2018
Old 12-21-2017, 03:57 PM   #1
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Any danger to MAGI going over CSR threshold this year if signed up for Bronze in 2018

I'm signed up for a Silver plan with Cost Sharing Reductions (CSR) for this year. Assuming my health holds for the next 10 days, I will have had no health expenses this year other than a flu shot and a physical, both 100% covered. I signed up for a Bronze plan for 2018 and next year intend to do Roth conversions up to 400% of Federal Poverty Level (FPL). When I signed up for next year, I said my MAGI would be about 399% of FPL in 2018. I'll get a substantial premium subsidy if I stay below 400% of FPL.

I had intended to do Roth conversions this year only up to 250% of FPL so I would remain eligible for Cost Sharing Reductions. Since it appears I won't have any CSRs this year and am not signed up for them next year, is there any danger to my MAGI in 2017 going over 250% of the Federal Poverty Level? If not, I'd like to increase the amount of my Roth conversions this year.

I itemize thanks mainly to my high property tax. I was putting my numbers into taxcaster, and if my Roth conversions only put my MAGI up to 250% of FPL, I won't owe any federal tax at all this year. If I increase my Roth conversions above 250% of FPL this year, for each additional $1,000 I convert up to about $8,000, my marginal tax rate would only be about 11% in federal tax. BTW, I suspect that the reason for the strange 11% marginal rate is that it's a crazy mix of additional taxable income, and health insurance subsidy & medical deduction going down as MAGI goes up.
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Old 12-21-2017, 04:03 PM   #2
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Here's a thread discussing MAGI What's the new MAGI formula under the new tax law?
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Old 12-21-2017, 04:21 PM   #3
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Thanks. However, my concern doesn't have to do with any changes from the tax bill or how MAGI is computed. Rather, I just want to make sure I don't run afoul of any arcane ACA rule pertaining to signing up for a plan with CSRs but then going over the 250% MAGI threshold for being eligible for CSRs. I'm not aware of any issues, but I wanted to make sure.

I believe I once read that if you go over the 250% FPL threshold, there isn't any means for the government to claw back any CSR payments. But since I won't have any CSR payments anyway, that doesn't even matter in my situation.
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Old 12-21-2017, 04:40 PM   #4
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I believe I once read that if you go over the 250% FPL threshold, there isn't any means for the government to claw back any CSR payments. But since I won't have any CSR payments anyway, that doesn't even matter in my situation.
That's my take on your situation too. They can't claw it back, and even if they could, there's nothing to claw back from you. But I've never really looked into CSRs.
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Old 12-21-2017, 04:46 PM   #5
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Yes, there is no clawback or reconciliation of cost sharing paid or incurred on your behalf. That's deductibles, co-pays, and co-insurance. The only reconciliation is the tax credit.
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