Overestimated Income

[bluemarlin08]

What if client overestimates income to qualify for ACA and avoid Medicaid,risks?

 

[rugerred]

Then they can't sign "I have answered all questions true to the best of my knowledge "

 

[Yagents]

These people must be republicans, as they're smart enough to beat the system.

If they're liberal, it's a crime, because Obama said Medicaid is good enough for his voters.

 

[bluemarlin08]

No penalty if client miscalculated income. They can project , hope or wish they will make X amount, but if they don't no foul, is what I read.

 

[MBSC]

An estimate which varies significantly from past tax returns will generate a request for documentation explaining why. If the exchange accepts the documentation and approves the income estimate, the person is not subject to payback if actual income is less.

 

[Justin Bilyj]

Had a client who did that, his wife ran off to an exchange plan from the OE plan I had her with, she overestimated her income to avoid Medicaid, they hit them with a 2-3k penalty after taxes were filed that they had to pay back because they said she should've been on Medicaid this whole time, which she doesn't like now that she is on.

Had a case the other day, Medicare for him, and his wife is less than 1k in annual income from getting massive subsidies, but she's hesitant to get subsidies because she doesn't want to pay them back if she qualified for medicaid this entire time. She said her boss and her is talking about a raise, I told her that would help her qualify for the subsidy and keep it.

 

[bluemarlin08]

Every place I have spoken with including the Kaiser Institute all claim there would be no penalty because it would be impossible to prove they were doing it in bad faith. "I think it would be quite challenging to prove they intentionally lied." - See more at: Estimating maneuver could help more people gain from Obamacare – Kansas Health Institute

 

[MBSC]

I'm not allowed to post the link but a Kaiser article I have bookmarked says:

Since the marketplace always makes the eligibility determination for tax credits, no one whose income ends up below the poverty level should have to repay.

The article is specific to APTC so it makes no mention of potential future penalties from other organizations, such as Medicaid.

 

[Chazm]

Happens a lot here in FL. If they make below the poverty level, they aren't eligible for Medicaid or a subsidy. My brother makes about $10k a year and has to pay full price if he wants coverage. He asked if he could just say if he makes more, I said sure but I'm not writing it

 

[hamben]

Ethereal is no pemLty for over estimating income. If they are paying a penalty then the tax preparer is wrong..