I'm late finishing up my 2019 taxes. But that's not my real problem. For 2019, I had a marketplace health policy (ACA) through Covered California, with a generous subsidy. During 2019, I received an insurance settlement that covered property damage and emotional distress. It was all reported to me on line 3 of a 1099-misc. This is taxable income by law. That is not the problem.
The problem is that according to publicly-available documents (see reference below) from both healthcare.gov and Covered California "Court awards/judgments/settlements for personal injury or sickness/emotional distress and other compensatory property damages" are NOT TO BE COUNTED when computing the Premium Tax Credit. YES THIS IS DIFFERENT FROM THE TAXABILITY TREATMENT! (As a matter of fact, both documents show a whole bunch of items that are not to be counted into MAGI for ACA). Yet when I enter the 1099 in Turbo Tax, the whole amount just flows to the MAGI on form 8962, and turbotax IS counting it towards MAGI, showing that I owe back thousands of $ of APTC. I don't see how to get this settlement deducted out of the ACA Magi in TurboTax. Actually, I don't see all of these exceptions in the IRS instructions either. It's as if the IRS designed the forms without including all the items that can be deducted from Form 8962 ACA MAGI as the healthcare agencies declared. Any thoughts?
https://www.dhcs.ca.gov/services/medi-cal/eligibility/Documents/Co-OPS-Sup/Income_Deductions_Chart_0...
