Thank you for your opinion.
The HCTC from what I read in the IRS guidebooks is totally different from Marketplace Insurance Medical Loss Ratio rebate check. I decided to do my taxes manually, on paper and I sent them in. I wasn't able to find out how to enter this properly in turbo tax. And I don't see any screen for where we can ask Turbo Tax for advice unless you pay for it possibly.
I followed the instructions of the 3rd person at the IRS that I was transferred to since the first two were not able to answer me. This person seemed to know what she was talking about so I reported the amount we received as a tax due (this is what she told me to do) and I was told do not report the Medical Loss Ratio Rebate as income. This all makes sense since the government paid 99% of the premium via subsidies.
We were not self employed nor were we employees. We are retired and obtained Marketplace insurance until we were able to get on Medicare. Our insurance provider simply sent out these MLR checks because they were required to since they must not have paid out on claims to a certain per centage in 2018. They informed us that they would not be sending any 1099 and it was our responsibility to figure out what to do about taxes. All they stated was that the check was ours to keep. I guessed this should not have been sent back to us but to the government. So in essence, from what the IRS expert stated, by us showing it as a "tax due" on line 12 (a) and marking box 3 which is blank for a comment section, we would be paying it back via our tax returns.
Personally, I think there should be a better system and the insurance provider should send it back to the government. I'm sure there will be many people who will not report this since they may not be receiving any 1099misc, etc. However, I think the government will be given a listing of all those who received any MLR checks this past year. And wouldn't you think they'll be checking each person's scenario and asking for their money to be returned??
I'll keep watching the IRS Frequenty Asked Questions in the Medical Loss Ratio page to see when they will address this for this year. The IRS gal stated this was at the top of her priority list to have this reviewed and hopefully an answer would be posted. I don't have time to wait so I sent in our taxes with the amount owed. I also included a letter explaining what we were doing and what I was told since I had the IRS agent's badge number written down. If they don't like it and return our returns, I'll post something again, but I'm hoping they accept it and keep their monies.
