ACA credits and Tax refunds

[MichaelB]

Quote:

Originally Posted by TimSF Great article, but I can almost not believe I am reading it correctly. If I seriously under-estimate my income (but do so in good faith) and receive an ACA-subsidy thereby, my penalty is nonetheless "capped" at an amount that may be LOWER than the true cost of my insurance??

Until I see the tax tables and instruction forms, I would suggest to my kids they budget their normal income tax and also expect to pay back the entire amount of the subsidy that exceeds their "best case" or "highest estimated" income level. If they are then asked to pay back less they can treat it as a windfall.

[Live And Learn]

Quote:

Originally Posted by MichaelB Until I see the tax tables and instruction forms, I would suggest to my kids they budget their normal income tax and also expect to pay back the entire amount of the subsidy that exceeds their "best case" or "highest estimated" income level. If they are then asked to pay back less they can treat it as a windfall.

+1 - that's what I've done for my own budget

[GTFan]

Quote:

Originally Posted by TimSF Great article, but I can almost not believe I am reading it correctly. If I seriously under-estimate my income (but do so in good faith) and receive an ACA-subsidy thereby, my penalty is nonetheless "capped" at an amount that may be LOWER than the true cost of my insurance??

It gets even better - if you estimated below 250% FPL and got Silver plan cost-sharing, you essentially get that for free even if you go way above your estimated income. All you owe is the capped penalty for the subsidy but you had a much better plan to boot.

[pb4uski]

Quote:

Originally Posted by GTFan It gets even better - if you estimated below 250% FPL and got Silver plan cost-sharing, you essentially get that for free even if you go way above your estimated income. All you owe is the capped penalty for the subsidy but you had a much better plan to boot.

Maybe they should have read it before they voted for it after all.

[Sue J]

I saw this posted yesterday, it's a link to the DRAFT versions of the IRS forms coming up for filing for 2014 in 2015. The first few currently at the top of the list are the 1040 and then a couple that apply to the Health Insurance Marketplace and Employer Coverage.

Draft Tax Forms

The 1095-A addresses the ACA credits.
http://www.irs.gov/pub/irs-dft/f1095a--dft.pdf

The 1040 - http://www.irs.gov/pub/irs-dft/f1040--dft.pdf
New info on Line 46 and 69 pertaining to Form 8962

Form 8962 that reconciles the credit difference if your income estimate was off.
http://www.irs.gov/pub/irs-dft/f8962--dft.pdf

Just a draft, subject to change.......