I believe the answer you gave me is INCORRECT. For 2024, I received a premium rebate of $242. If I do as you say and include that as miscellaneous income on Schedule C, my AGI goes up by $1201 due to the snowball of self-employment tax, healthcare premium tax credit, qualified income deduction, etc.; and I end up owing $251 more in taxes to the Feds + $41 more to Colorado. That makes absolutely no sense!
This isn't actually income, it's a reduction in the healthcare premium -- and as I'm finding out there's a big difference.
You said I should "claim the recovery the same way you claimed the expense". The only way I can see to do that is to alter the data entered in Form 1095-A, for example reduce the premium paid by $242 for the month when I received the rebate. I **think** that ripples through the return correctly, I end up owing an additional $43 Federal and $8 Colorado. But I'm not at all sure if this is the correct way to account for this, and changing the 1095-A values makes me nervous.
What is the correct way to handle this?
