Quick Question about Health Insurance Marketplace Form for IRS

[FiveDriver]

Is there any quick way to determine if the Form 1095-A will have any impact on our Income Tax calculations ??

We have almost all of our Tax Docs in hand (still waiting on some). The 1095-A form lists Dollar figures for each month, In all the years DW has been on ACA, I still haven't figured out how this form affects our Income. We've been on the cusp of either a free ride, or huge payback. And if you go One Dollar over the limit -- you owe them big time.

This is her last year in the 'Marketplace' as she started Medicare in February. Can't wait to say good-bye to this muddled up mess of a system. We will let our CPA do the detailed calculations.....I have our Income estimated to within a hundred bucks or so. I just want to avoid any surprises.

Thanks in Advance.

 

[scrabbler1]

An important number on Form 1095-A is the Second Lowest Cost Silver Plan (SLCSP). The higher this amount is, the higher your gross ACA premium subsidy is (see tax form 8962). The gross ACA premium subsidy is compared to the subsidy you actually received throughout the year. If the subsidy you received is less than the gross subsidy, then any leftover amount is applied to your tax bill as a credit, either reducing what you owe or increasing your refund. If the reverse applies, you either owe more on your taxes or receive a smaller refund.

Having not gone over the ACA premium subsidy cliff since 2019, I am not sure how the reverse works - I believe the cliff penalty is phased out, not an all-or-nothing deal like it was years ago. Others can chime in on that.

 

[FiveDriver]

Thank you scrabbler !! This is a detail I did not know about. Our SLCSP is $985 per month. I'll have to fetch out our Form 8962 from the pile on the Dining Room table.

I got so tired of tap-dancing around that cliff and then either getting a rebate or getting clobbered with a big tax bill. We said just give DW health coverage.
It's her last year before Medicare kicks in.

 

[cathy63]

There is no cliff right now. Congress eliminated it from 2021 through 2025. The max you will pay for health insurance is 8.5% of your income.

But yes, the way to figure out if you had too much subsidy or not enough is to fill out form 8962.

 

[FiveDriver]

I looked in the pile on the table.....I couldn't find the form 8962.

Who sends out that form ?? Did they combine that info onto 1098-A ??

 

[cathy63]

I looked in the pile on the table.....I couldn't find the form 8962.

Who sends out that form ?? Did they combine that info onto 1098-A ??

Form 8962 is the form you fill out and send to the IRS with your tax return. You use the information on form 1095-A, which you received from your state's marketplace, to fill out form 8962. Here's a link to the form: https://www.irs.gov/pub/irs-pdf/f8962.pdf

 

[RunningBum]

Go look up what income you estimated on your ACA marketplace application. If that's lower than what you now estimate your income to be, you'll owe some money. If it's higher, you'll get some money back.

 

[FiveDriver]

Form 8962 is the form you fill out and send to the IRS with your tax return. You use the information on form 1095-A, which you received from your state's marketplace, to fill out form 8962. Here's a link to the form: https://www.irs.gov/pub/irs-pdf/f8962.pdf

Thanks cathy. I googled and found it on my own. It's all coming back to me now.....the nightmare that is ACA !! I'll give it a run-thru with my estimates, but the CPA will fill it out with the real numbers soon enough.

I'm glad to hear they did away with that 'Cliff' it was awful. In a previous year, we used TurboTax and when we went One Dollar over the limit....that TurboTax 'Amount Owed' box started spinning like a pinball table gone crazy !!

 

[oldtimer]

Thanks cathy. I googled and found it on my own. It's all coming back to me now.....the nightmare that is ACA !! I'll give it a run-thru with my estimates, but the CPA will fill it out with the real numbers soon enough.

I'm glad to hear they did away with that 'Cliff' it was awful. In a previous year, we used TurboTax and when we went One Dollar over the limit....that TurboTax 'Amount Owed' box started spinning like a pinball table gone crazy !!

If you will be going on Medicare sometime in the future, then you will be introduced to the IRMMA cliffs.

 

[RetiredAndLovingIt]

I got my 1095A Federal but I've been waiting for my Covered California Form 3895 to start my taxes. I just called them and got the recorded message that we don't get one for 2022. Sure enough when I looked at my paperwork, I did not get the dollar or whatever small subsidy that my state normally chips in.