Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please Type Topic Into Search Bar

how to address your income when on ACA for 3 mo due to unemployment and estimated based on YTD, but dropped ACA once employed?

We were on obamacare insurance for 3 consecutive months in 2014 (apr - june) due to unemployment. when signed up, we were told to give our income as of that point in the year due to not knowing of when/if new employment would come. We paid premiums based on income through June. Employment was gained and we dropped obamacare due to having employer insurance - we called in June and updated information with marketplace of new income, employment, etc. as instructed. We cancelled insurance and started July 1st with employer insurance. Now at tax time, they are using our entire income for the year to say we did not qualify for the marketplace insurance and need to repay all the $3,000 premium credit because we made too much money with my husbands new job he obtained. However, the insurance was not used when we had employment and we were told our income that the credit would have been based on would be what we had made for the entire year up till the point we cancelled marketplace insurance. Help! Marketplace and IRS have both stated they have yet to be trained on how to handle this situation.
Obamacare Obamacare Tax Penalities Obamacare Affordable Care Act
TaxConnections Members... Answer This Question Want To be One of Our Tax Experts? Register Here

Tax Professional Answers

User Photo
Kathryn Morgan
Unfortunately at this point the IRS and the Marketplace people you spoke with are correct. They, nor most tax pros have been given any direction in situations like yours. The IRS just last week released Pub 974 which is supposed to have addressed some of these issues, but didn't do a very good job of it. According to the IRS there are several things in the works to be published soon to give more concrete guidance. Mat this point your options are to file the return as is, repay the credit and then amend when the clarifications come out or file an extension by 15 April and pay any balance due you have less the repayment. The IRS has said they will forgive penalties and interest on unpaid repayments until clarification is released.
Leave a Comment 289 weeks ago

User Photo
Question Owner
Thank you Kathryn. Please keep me posted if any more updates and clarifications come forward on this issue. I read Pub 974 and found some hope but no clear answers. Thanks for your help...continued insight and guidance appreciated.
Reply 287 weeks ago


Meet Leading Tax Advisors

User Photo John Stancil

Professor

Lakeland

User Photo Peter J. Scalise

Federal Tax Credits & Incentives Practice Leader

New York, NY

User Photo John Dundon, II EA

Tax Director

Denver, CO

User Photo William Rogers, CFP, MBA, EA

CEO/Certified Financial Advisor

Rancho Santa Fe, CA

User Photo Monika Miles

President

San Jose, CA

User Photo Blake Christian

Tax Partner

Long Beach/ Park City, CA

User Photo John Richardson

Lawyer

Toronto, Canada

 

View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page

INCREASE KNOWLEDGE WITH EVERY ISSUE OF TAXCONNECTIONS

 

Learn from tax advisors, straight to your inbox

Update My Email Address
Contact Us Today