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Old 01-16-2020, 06:57 AM   #21
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Originally Posted by pb4uski View Post
For one, that is stupid on their part. You currently own the stock fund and the timing and amount of dividends can probably be reasonably estimated from their 2019 distributions. In any event, it makes no sense to amend your application for the December income since your December subsidy will have been paid by then.

But nonetheless, can you exclude the new fund as they ask and then conveniently forget about the amendment and the true up will get caught up when you file your 2020 tax return in early 2021?
I surely agree it is stupid on their part. I have never updated my application midyear to reflect any "lumpy" income source.

I am strongly considering not updating the application for any income changes the way you described, and simply reconcile any differences early next year.

I actually had some experience trying to send proof of income back in 2014-2015 when these exchanges and subsidies began. I uploaded either an annual or monthly account statement and possibly a 1099 and the NY marketplace ignored all of it, refusing to grant me any advanced PTC (which was maybe $40 a month at the time). They kept sending me more emails asking me for proof, too. I called them after the third email and after I told the agent I wasn't seeking any advanced PTC because it was so small and would reconcile it at tax time, he told me to ignore the emails and they would disappear (they did).

I don't really want to go that route this time because the subsidy is so big. I do wonder if anything I send them will be ignored again so they end up canceling the advanced subsidy. I would then have to take the Appeal route, requesting a hearing (over the phone) so I could actually speak to a PERSON and explain my situation to someone who can actually understand it and do the right thing. It would be a PITA, for sure.
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Old 01-16-2020, 07:16 AM   #22
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I think I would amend my application once, but if that doesn't stick be prepared to find some way to front up the $4,320 for the year and just get it back at tax time rather than deal with those bozos.
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Old 02-02-2020, 10:06 AM   #23
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I think I would amend my application once, but if that doesn't stick be prepared to find some way to front up the $4,320 for the year and just get it back at tax time rather than deal with those bozos.
After receiving my 1099s, I made copies of 2 key pages and wrote some notes on them from the letter I had prepared, arriving at the 2020 (revised) estimated income I entered elsewhere in the website. I then scanned them and, along with the sales confirmation order with its own notes, uploaded the 3 pages into the website.

On the shaky assumption that some bozo at the other end will actually READ and understand what I wrote, I do expect them to somewhat reduce the subsidy I got for February but keep it in place for the rest of the year. If they don't, then I will either appeal or pay the full freight for the whole year, not sure which (probably the former).

Next year may renew this problem if they use my 2019 tax return. But I can then give them my 2020 tax return around this time to more easily prove I am deserving of the subsidy.
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Old 02-02-2020, 11:18 AM   #24
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It's worth remembering that the system isn't designed for people like us. We have much different sources of income than the typical ACA plan/subsidy recipient, and those who receive our explanations are much more used to reasons like "I got a better job" or "I lost my job" than reasons like "I won't do Roth conversions or sell as much stock or whatnot next year".
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Old 02-02-2020, 12:00 PM   #25
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If your FPL is 250% or less and you are in a Silver plan it makes sense to make an estimate since you would get cost sharing reductions. If you wait until the end of the year and tax time you would miss out on them.
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Old 02-02-2020, 12:15 PM   #26
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It's worth remembering that the system isn't designed for people like us. We have much different sources of income than the typical ACA plan/subsidy recipient, and those who receive our explanations are much more used to reasons like "I got a better job" or "I lost my job" than reasons like "I won't do Roth conversions or sell as much stock or whatnot next year".
I've already discovered that with respect to the phone reps. When I told them about how my investment income was going to drop in 2020, they simply parroted what it in the marketplace's website, stuff which doesn't make much sense to me and didn't show any imagination by the reps. For example, they and the website said I needed a letter from the investment company on their letterhead stating I had sold my shares. A letter? I asked if a transaction confirmation was the same thing and they had no clue. I uploaded mine anyway.

I already got some automated reply today telling me I needed to send them proof of income. I had uploaded the documents yesterday, so I doubt anyone actually looked at them yet. I'll give them a few weekdays to review them before I call the phone rep flunkies again.

At least with an appeal I know I'll talk to a person more knowledgeable and who can make a decision.
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Old 02-02-2020, 12:57 PM   #27
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For 2017, they wanted income proof from me, but not since then.
I am guessing it is due to pretty much hitting the estimate, but also my TIRA distribution represents the income and not dividend flows, CD interest, etc,
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Old 02-03-2020, 06:01 PM   #28
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If your FPL is 250% or less and you are in a Silver plan it makes sense to make an estimate since you would get cost sharing reductions. If you wait until the end of the year and tax time you would miss out on them.
Excellent point. I consistently claim my income to be at such a level that I qualify for Silver plans with $0 deductibles and low out of pocket max.

The first year I did that (2018), my MAGI was 28% more than my estimate (but still under the cliff). Instead of having to pay a penalty, I actually received a $450 refund (I paid no taxes) because I had added my minor son halfway thru the year which would have raised the monthly subsidy.

The next year (2019), I again estimated my MAGI at the same amount as 2018. And I also went over by about the same amount (28%). BUT - the penalty amount was only $650 which was cancelled out by the child tax credit with a net due of $0. In effect, my MAGI could have been right up to a dollar less than the cliff and I wouldn't have had to pay the penalty (around $1750?) because of the child tax credit.

Crazy how it works. But I've never been questioned about my MAGI estimate and have done the same for this year.
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Old 02-03-2020, 06:06 PM   #29
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Excellent point. I consistently claim my income to be at such a level that I qualify for Silver plans with $0 deductibles and low out of pocket max.

The first year I did that (2018), my MAGI was 28% more than my estimate (but still under the cliff). Instead of having to pay a penalty, I actually received a $450 refund (I paid no taxes) because I had added my minor son halfway thru the year which would have raised the monthly subsidy.

The next year (2019), I again estimated my MAGI at the same amount as 2018. And I also went over by about the same amount (28%). BUT - the penalty amount was only $650 which was cancelled out by the child tax credit with a net due of $0. In effect, my MAGI could have been right up to a dollar less than the cliff and I wouldn't have had to pay the penalty (around $1750?) because of the child tax credit.

Crazy how it works. But I've never been questioned about my MAGI estimate and have done the same for this year.
Hey, don't ruin it for the rest of us by artificially underestimating MAGI, so you still keep the CSR subsidy.
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Old 02-13-2020, 07:16 AM   #30
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I've already discovered that with respect to the phone reps. When I told them about how my investment income was going to drop in 2020, they simply parroted what it in the marketplace's website, stuff which doesn't make much sense to me and didn't show any imagination by the reps. For example, they and the website said I needed a letter from the investment company on their letterhead stating I had sold my shares. A letter? I asked if a transaction confirmation was the same thing and they had no clue. I uploaded mine anyway.

I already got some automated reply today telling me I needed to send them proof of income. I had uploaded the documents yesterday, so I doubt anyone actually looked at them yet. I'll give them a few weekdays to review them before I call the phone rep flunkies again.

At least with an appeal I know I'll talk to a person more knowledgeable and who can make a decision.
I heard back from the NY Marketplace this morning. Someone there read my uploaded documents and they agreed with what I sent them and will maintain the APTC subsidy I am set to receive for March for the rest of the year.

Color me stunned!
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Old 02-13-2020, 07:43 AM   #31
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We just estimate the lowest possible income + a fudge factor so as not to raise any alarms, then pay the difference on our tax returns. We have learnt that using a broker to do the ACA paperwork on our behalf, does not raise any red flags. The only supporting paperwork we have been asked for was proof of citizenship.

E.G:

Estimated low under the radar income for 2019. This gave DW a MAX Cost Sharing Silver plan. Resulting in a VERY low insignificant premium, $0 Deductible, Small MOOP, $0 Doc CoPay and $5 Specialist CoPay.

Actual income on 2019 Tax Return was a lot higher, but we only has to pay ~$2,000 back. Still enjoyed all the cost sharing with no penalties. Yes you could call it working the system, but that is what most folks do all the time, and not just for the ACA, for anything. Just ask the Corporations that pay $0 Tax. Why should they have all the fun.
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Old 02-13-2020, 08:49 AM   #32
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Loopholes, legalities, and ethics aside, the simple fact that the IRS is on the receiving end of the income estimate that I provide is enough to deter me from providing anything other than my best-faith estimate of what my actual income will be.
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Old 02-13-2020, 08:53 AM   #33
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Actual income on 2019 Tax Return was a lot higher, but we only has to pay ~$2,000 back. Still enjoyed all the cost sharing with no penalties.
That's odd, the max APTC you have to pay back for a 94% CSR Silver plan should be $600 if you underestimate income. I was about $5k over estimate last year and that's what we paid.
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Old 02-13-2020, 08:55 AM   #34
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Loopholes, legalities, and ethics aside, the simple fact that the IRS is on the receiving end of the income estimate that I provide is enough to deter me from providing anything other than my best-faith estimate of what my actual income will be.
Cap gains and divs can vary widely from year to year, there's no way I can accurately estimate income. I'm not worried about that, we're small fish in a big pond.
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Old 02-13-2020, 10:40 AM   #35
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We just estimate the lowest possible income + a fudge factor so as not to raise any alarms, then pay the difference on our tax returns. We have learnt that using a broker to do the ACA paperwork on our behalf, does not raise any red flags. The only supporting paperwork we have been asked for was proof of citizenship.

E.G:

Estimated low under the radar income for 2019. This gave DW a MAX Cost Sharing Silver plan. Resulting in a VERY low insignificant premium, $0 Deductible, Small MOOP, $0 Doc CoPay and $5 Specialist CoPay.

Actual income on 2019 Tax Return was a lot higher, but we only has to pay ~$2,000 back. Still enjoyed all the cost sharing with no penalties. Yes you could call it working the system, but that is what most folks do all the time, and not just for the ACA, for anything. Just ask the Corporations that pay $0 Tax. Why should they have all the fun.
My 2020 income estimate included all the 2019 income from the holdover bond funds, nearly all of it monthly dividends with a tiny part of it cap gain distributions. To that I added an estimate of the dividend income from the new stock index fund based on a 3-year average of the DPS for the fund. I didn't include any cap gains because they are quite low and very erratic. But I did include some realized cap gains from 2 January sales from the holdover bond funds. I don't plan on updating my income again in 2020.

I wonder what the SLCSP they use in their subsidy estimate. I also don't know what the %-of-MAGI figure they use because the chart which will appear in the 2020 instructions for Form 8962 isn't out yet. I have to insert my best guesses on both figures in my tax spreadsheet. (I use the 2019 %-of-MAGI chart and a 110%-of-2019-SLCSP amount, for now.)

If I am undershooting on the subsidy, any remaining subsidy will help pay my income taxes due, as I have no taxes withheld and make no estimated tax payments.
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Old 02-13-2020, 11:26 AM   #36
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That's odd, the max APTC you have to pay back for a 94% CSR Silver plan should be $600 if you underestimate income. I was about $5k over estimate last year and that's what we paid.
I do not think so, at least not for us in Florida. I simply remove the ACA subsidies from TT and the $2500 goes away. So it must be related to the ACA. It was the same last year too.
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Old 02-13-2020, 11:35 AM   #37
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Loopholes, legalities, and ethics aside, the simple fact that the IRS is on the receiving end of the income estimate that I provide is enough to deter me from providing anything other than my best-faith estimate of what my actual income will be.
I am with you on this one, but everyone feels different about different loopholes.
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Old 02-13-2020, 07:42 PM   #38
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I do not think so, at least not for us in Florida. I simply remove the ACA subsidies from TT and the $2500 goes away. So it must be related to the ACA. It was the same last year too.
Well if you're getting a max CSR Silver plan (estimated income less than 150% FPL) and your actual income is between 300% to 400% FPL then yeah the ACA PTC penalty is $2650. (Line 28 in form 8962 is what I'm talking about: https://www.irs.gov/instructions/i8962)

But you're seriously underestimating income in that case, and that goes beyond what I'd call gaming the system if you do it every year.
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Old 02-13-2020, 11:47 PM   #39
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I wonder what the SLCSP they use in their subsidy estimate.
It is based on your zip code and family size (and maybe ages and tobacco use, not 100% sure on that).

You should be able to figure it out by putting your zip code and family information into your marketplace, shop for plans, then select Silver plans, then look at the second lowest premium. That should be it.

Theoretically if the insurance companies competing in the marketplace change their prices or enter or leave the marketplace mid year, then it could change, but I suspect that is not common.
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Old 02-13-2020, 11:48 PM   #40
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I do not think so, at least not for us in Florida. I simply remove the ACA subsidies from TT and the $2500 goes away. So it must be related to the ACA. It was the same last year too.
You repay whatever APTC you were not entitled to receive, up to a limit.

The repayment limit depends on what your AGI for the year turns out to be (and your filing status). The higher your actual AGI, the higher your repayment limit.

If your AGI is above 400% FPL, then your repayment is unlimited. Also, if you're above 400% FPL you don't get any PTC, so you'd have to repay all of your APTC.
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