Healthcare Premium Tax Credit

[jaxgab]

I am looking at my son's 2018 tax return and am surprised he doesn't seem to qualify for a Healthcare Premium Tax Credit.  He is single with no dependents, his 2018 adjusted gross income was $ 7,873 and his monthly Obamacare insurance premium was $ 302 and he received no advanced payments of his premium tax credit during 2018.  Turbotax claims his credit for his insurance premiums ($ 0) was the right amount.

What disqualifies him from getting any Healthcare Premium Tax Credit?

[jaxgab]

Perhaps I should have added the SLCSP, which is $ 434.86 per month.

[dmertz]

He does not qualify for PTC because his income was less than 100% of the federal poverty line and he received no Advance PTC because his estimated income at the time he enrolled in the Marketplace plan was less than 100% of the federal poverty line.  Had he received at least $1 of APTC because his estimated income at enrollment was at least 100% of the federal poverty line he would have likely qualified for $3,624 of PTC.

See Estimated household income at least 100% of the federal poverty line  and the CAUTION on page 8 of the instructions for Form 8962:  https://www.irs.gov/pub/irs-pdf/i8962.pdf

[BMcCalpin]

I believe that there is no PTC for taxpayers whose incomes are under the Federal Poverty Level because they likely qualify for Medicaid, therefore don't generally need to buy a Marketplace policy. In states with expanded Medicaid, the low income alone probably would have qualified your son for Medicaid. However, the eligibility requirements do vary from state to state. See https://www.healthcare.gov/medicaid-chip/ for the government's take on this situation.

[jaxgab]

When he applied for the Obamacare policy, he gave them a SWAG income estimate for the following year ($ 12K?) since he doesn't have a steady job and still goes to school.  That $ 12K estimate would prevent him from qualifying for Illinois Medicaid.  At the same time, he elected not to receive any any advance premium payments during 2018 and would take instead take the credit when he finally filed his taxes.

So his tax refund would increase substantially by simply reporting $ 5,000 in non W-2G gambling winnings?  That is apparently true but makes no sense.  I am sorry, but only the U.S. government could come up with a tax law that silly.

[jaxgab]

Your answer is apparently accurate but makes no sense. I am sorry, but only the U.S. government could come up with a tax law that silly.

[dmertz]

Yes, if his 2018 household income was greater than or equal to 100% of the federal poverty level (but less than 401%), he would apparently qualify (or at least would not be disqualified for having insufficient income and having received no APTC).

Given that he estimated income of less than 100% of the federal poverty limit and actually had income of less than 100% of the federal poverty limit, it seems that his estimate was reasonably accurate.

If he had gambling winnings in 2018, they must be reported as miscellaneous income.  Reporting gambling winnings not actually received would be fraud.