Premium Tax Credit

[jay130]

My wife and I both started out the tax year 2021 on ACA and received an advance credit for our premium.

On February 1, 2021, I transitioned over to Medicare while my wife remained on ACA for the remainder of the year.  Our modified AGI is $65,310 which is about $800 less than we forecast for our income for Pennie (PA) while creating our 2021 ACA application.

My question is:

The calculations performed in Part I of Form 8962 are based on 2 people (modified AGI, etc.) and for the the month of JAN, the calculations in Part II of Form 8962 make sense.  However for the remaining 11 months, the Monthly Second Lowest Cost Silver Plan (SLCSP) Premium (column B from the 1095-A) is converted to a dollar value based on one person.  Starting in FEB, the monthly premium tax credit allowed is calculated differently, the smaller number comes from column d, not column a.  It seems like it changes from apples to oranges in terms of how the calculations from Part I affect the calculations in Part II.

Is there a way to allow for this transition ?

[AmeliesUncle · Accepted solution]

It seems to be calculating correctly.

As you have noticed, the contribution amount (column c of the 8962) is based on the number of people on your tax return, regardless if they have Marketplace insurance or not.  The result is a lower credit if some members of the family do not have Marketplace insurance.  Sadly, that is how Congress wrote the law.

[jay130]

Well, that's the way I figured based on the numbers, but I sure do appreciate your post to confirm my thinking.

Thanks, Jay