I took a 2020 Qualified Disaster Distribution and allocated it over 3 years. In 2022, I applied for marketplace health insurance and received an advanced premium tax credit. I am being told by turbo tax program I have to repay it all back because I didn’t qualify due to allocation of the distribution in 2020. I did not receive that money in 2022, but understand I opted to have it count as income over 3 years. I however was not aware that this money I didnt get in 2022 would put me over limit to be eligible for the ACA credit. I didn’t have the money to use for health insurance in 2022 so why am I being penalized and why does it even count for ACA credit calculation.
