@teachercaren01 wrote:
YES THIS IS DIFFERENT FROM THE TAXABILITY TREATMENT!
No, it is not. If it is taxable, it DOES count as income for the Premium Tax Credit. That is what the law says.
You also said "many other things that are supposed to be deductible from form 1040 AGI before coming up with form 8962 MAGI". That is not true. The only thing the law adjusts your AGI for the Premium Tax Credit is (1) tax-exempt interest, (2) non-taxable Social Security and (3) excluded Foreign Earned Income.
Your citation and link is regarding non-taxable situations, which means it does not affect the Premium Tax Credit.
@teachercaren01 wrote:
I received an insurance settlement that covered property damage and emotional distress.
Just because it is on a 1099 does not necessarily mean it is taxable. Compensation to repair property damage is not taxable. As for the emotional distress, that is probably taxable. It is taxable unless it comes from, or causes, physical injury or sickness.
https://www.irs.gov/pub/irs-pdf/p4345.pdf
