Health Care Reform Subsidies Are Considered a Tax Credit and Taxable Income

[Crabcake Johnny]

Hang on just a second there. If they take more subsidy than eligible for up to 400% of fpl they don't owe all of it back, so they may count the difference as income...I'm thinking...maybe..

Hmmm. Let's take an extreme case - someone gets huge subsidy of $1000 a month based on the applicant stating false low income. Come tax time the IRS sees that they never qualified for any subsidy. I say they owe 12k.

 

[scagnt83]

Hang on just a second there. If they take more subsidy than eligible for up to 400% of fpl they don't owe all of it back, so they may count the difference as income...I'm thinking...maybe..

Go read the IRS website. It explains exactly what happens in that situation.

The Premium Tax Credit

 

[houcoogster]

Hmmm. Let's take an extreme case - someone gets huge subsidy of $1000 a month based on the applicant stating false low income. Come tax time the IRS sees that they never qualified for any subsidy. I say they owe 12k.

Uhh No Sir. That would be the case only if they earned over 400%FPL.

My thinking on this now is this;
If you get more than you're eligible for you may not have to pay it All back. However what you don't have to pay back you ain't getting "tax free".

 

[Crabcake Johnny]

Uhh No Sir. That would be the case only if they earned over 400%FPL.

My thinking on this now is this;
If you get more than you're eligible for you may not have to pay it All back. However what you don't have to pay back you ain't getting "tax free".

So wait - if you're 390% FPL just state income putting you at 150% then only pay taxes on the difference come tax time?

 

[houcoogster]

Go read the IRS website. It explains exactly what happens in that situation.

The Premium Tax Credit

You see scant you're falling into the same trap I fell into reading the law going to official web sites ect....reading all this stuff...guess what? a lot of this is not printed anywhere we can find....I learned the hard way.

We are flying by the seat of our pants here.

 

[scagnt83]

You see scant you're falling into the same trap I fell into reading the law going to official web sites ect....reading all this stuff...guess what? a lot of this is not printed anywhere we can find....I learned the hard way.

We are flying by the seat of our pants here.

So you trust bc/bs over the IRS's own statements??

 

[houcoogster]

So wait - if you're 390% FPL just state income putting you at 150% then only pay taxes on the difference come tax time?

No. There are what is called repayment limits.

What I'm saying may be the case is after you pay the limit that is deducted from what you were Not eligible for you would pay the income tax on that amount.

EX: Got $3500 in subsidy, you were eligible for $1500, your repayment limit is $750, so you would pay income tax on $1250.

 

[Yagents]

EX: Got $3500 in subsidy, you were eligible for $1500, your repayment limit is $750, so you would pay income tax on $1250.

I don't think that's right, I think it's $2000 or $2750 would be taxable income

 

[TXINSURANCE]

Repay limits... That is a joke. I will ask for a repay limit next time I owe taxes. True up is a true up. Why one class of citizen can cheat and the other can not is just wrong.

 

[houcoogster]

I don't think that's right, I think it's $2000 or $2750 would be taxable income

Bill I was offering this as an example so he could understand what I was trying to explain to him these were not exact figures.

I'm glad to see that you agree with my take on this situation!