Tax Question: Obamacare Premium Tax Credit

[TromboneAl]

Concerning these two screens from Taxact:

My understanding is that, because our income went up due to good performance of our investments, the advanced subsidy was too high. It makes sense.

1. How does the repayment limit work? Do I need to path the additional $208 at some point?

2. What does the text in the red ellipse mean? And do I just do what it says and enter -1,500 in that box?

Thanks,

Al

 

[jim584672]

If your income is between 200 and 300% FPL and filing status is other than single then $1,500 is the most you will have to pay back. I am not familiar with TaxAct so I can't help with the screen shot.

 

[Texas Proud]

I wonder how many people are getting excess PTCs....


Was the income at the end of the year or earlier? You are supposed to update the website if your income changes. If at the end of the year there is nothing you can do as it is already too late.

 

[jwkde]

Your Schedule A deductions for health insurance (assuming you are itemizing) is your total out of pocket after the subsidy. So if you have to pay some of the subsidy back on the 1040 you can add that amount to your Schedule A itemized medical deductions.

It is odd because you are paying the excess back in 2016 calendar year but you get to deduct it on your 2015 tax return. But that is the correct way to do it. That is why Tax Act wants to adjust your Schedule A

 

[gauss]

I wonder how many people are getting excess PTCs....

Probably near 100% of those who didn't forecast non-taxable portion of Social Security income (which is indeed included in the PTC calculation) when applying.

 

[MBSC]

I wonder how many people are getting excess PTCs....

I slightly underestimate income to get excess APTC. It's like an interest free loan. I do not hit the repayment limit, however.

 

[Texas Proud]

Probably near 100% of those who didn't forecast non-taxable portion of Social Security income (which is indeed included in the PTC calculation) when applying.

So that would lead to the question of how many people are in the exchange and also getting SS... I would bet not a big %....

I slightly underestimate income to get excess APTC. It's like an interest free loan. I do not hit the repayment limit, however.

But you are someone who thinks about what happens.... most just put down numbers and then find out the results at the end...


I did not put any info down so I do not get a credit, but charge my premium and get 1.5% cash back on my CC... worth more to me than an interest free loan.... getting a huge refund back this year....

 

[TromboneAl]

Okay, got it.

This happened because I rebalanced by selling all shares in a stock fund that was in our taxable account.

Next year it will go the other way, since our income will be lower.