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Yeah Scott, we discussed this and I'm sticking with my "no" answer on this.
Here's the question in a nutshell: If a family of 4 is getting a $500 per month subsidy, will they owe income taxes on that amount - or $6,000 in this example.
My answer? No, they won't. However, no on really seems to able to find a clear "yes or no" answer. My wife does tax prep for Jackson Hewitt and backs me up - that a tax credit (in this case, subsidy) cannot be taxed as income 'cause it's not income. It doesn't even come close to meeting the definition of income.
Beyond that, the "poorest" people will qualify for the largest subsidy therefore the largest tax bill? Doesn't make any sense. If true, this will be a global nuclear explosion come tax time as people earning 200% FPL find out they owe taxes on the subsidy.
Here's the question in a nutshell: If a family of 4 is getting a $500 per month subsidy, will they owe income taxes on that amount - or $6,000 in this example.
My answer? No, they won't. However, no on really seems to able to find a clear "yes or no" answer. My wife does tax prep for Jackson Hewitt and backs me up - that a tax credit (in this case, subsidy) cannot be taxed as income 'cause it's not income. It doesn't even come close to meeting the definition of income.
Beyond that, the "poorest" people will qualify for the largest subsidy therefore the largest tax bill? Doesn't make any sense. If true, this will be a global nuclear explosion come tax time as people earning 200% FPL find out they owe taxes on the subsidy.
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