Question About 1095-A

[pferris9]

I am retired.  My income is SS and my healthcare is Medicare. 

My wife is still working (2 days a week).  So she's had to provide her own healthcare benefits (Marketplace - aka Obama Care).  I just entered a 1095-A for my wife. I watched my Federal taxes go from a $1145 refund to a $4,514 PAYMENT to the IRS immediately after entering all the 1095-A data!  I am stunned!  What caused this and how can I prevent it this year (already near the end of Q1!).   Once I saw that, I stopped dead in my tracks.  This is CRAZY!  

Any and all help appreciated!

Pete

[CatinaT1 · Accepted solution]

Is your wife on Medicare? You can not have a Marketplace Plan if you have Medicare.

When you enroll in a Marketplace plan, you estimate your household income for the year. This determines the amount of Advanced Premium Tax Credit you are eligible for. When you file your tax return, your Actual Premium Tax Credit is calculated on your Actual household income for the year.

If you underestimated your household income for the year and received too much Advanced Premium Tax Credit, you must pay back any overpayment you received.

That sounds like what happened. Do you know what you estimated your income for the year to be when you applied for coverage compared to what it actually was?

[pferris9]

Correction: The amount TT says I owe is $5465!!  

Can anyone explain why / how entering ACA data (1095-A) can take you from a >$1K refund to a >$5K deficit owed?!  I'm totally confused.  How do I avoid this for next year? 

I'm going crazy with this.  I'm retired and don't just have $5K in my pocket. 

Thanks for all / any help!

Pete

[pferris9]

Hi @CatinaT1 ,

I am on Medicare, my wife is not.  I am retired, my wife is not. We usually file jointly.

I appreciate your answer, I truly do.  Unfortunately my wife isn't home at the moment to ask what she stated when she applied. 

I'm just stunned.  She had very few medical claims, etc.  

Thanks so much for answering.  I'm not sure how to proceed. 

Thanks again, @CatinaT1 

Pete

[Mike9241]

You can get ObamaCare as a secondary insurance, but you can't get tax credits on it. Generally holding more than one comprehensive insurance plan makes no sense. However, there are exceptions to this rule (such as when both spouses have an employer plan, when a person holds Medicaid and Medicare, or when a person holds multiple parts of Medicare).   so basically all those premium tax credits she got have to be repaid

 did her marketplace insurance cover you because it is very easy to err when entering the 1095-A. also if your household income line 3 of 8962 is more than about $70,000 you are not entitled to any credits.  we can't see your return so you'll need to review the form.

[JohnB5677]

@pferris9 Please go back and look at what was posted to the 1095-A.  Column C is the Advanced Credit Premiums.  It would have to be at least $600 a month to make that large a difference in your refund.  If column C is that large you would have to check with your wife to see if she included you in the total household income.  If Column C is not that big, I think something different is happening.

If at the end of the year you've taken more premium tax credit in advance than you're due based on your final income, you'll have to pay back the excess when you file your federal tax return. If you've taken less than you qualify for, you'll get the difference back.

[pferris9]

Hi @JohnB5677 ,

Yes, column C is $917 x 12 mos. 

So, should she count MY income (which is primarily Social Security) when figuring "household income" - or just her own (if she's the only one using the ACA plan?)?

Now that we're reaching the end of Q1 / 2023...  Can we change things for this year or is it too late?  Can it be revised?

I really appreciate your and everyone else's help as I navigate through this. 

[JohnB5677]

$915 a month is a lot of money to discount.  

• Be sure that she doesn't have you on the policy.  If you're on Medicare, you can't be on an ACA policy.
• Yes, the premium is based on the "Household Income", so yours should be included.
• Yes, this is the time to make an adjustment.
• Use the link below to get some guidance.

To continue your existing application by phone or online

[AmeliesUncle]

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@pferris9 wrote:

So, should she count MY income (which is primarily Social Security) when figuring "household income" - or just her own (if she's the only one using the ACA plan?)?

Yes, the Premium Tax Credit is calculated using the entire income on the tax return.  So that includes both of your incomes.  If she only told the Marketplace about her income, that is why you have a large repayment.

You should test out the results of both of you filing as Married Filing Separately.  It will reduce her repayment, but will likely cause an increase of income tax.  But you should try it out and see which results are better.

[pferris9]

Thanks for that suggestion. 

I will try that and see if it make an appreciable difference. 

I appreciate all the help and suggestions in this forum / community. 

Lesson learned for next year sigh!  School of hard knocks graduate here. 

Thanks all!