I am 66 and my wife turned 64 in late January 2021. We file jointly.
I am on Medicare, of course, but she has been enrolled in the ACA through Healtcare.gov since its inception. (We live in Florida, which I suppose is pertinent - no Medicaid expansion...)
In March of 2020, she lost her job due to COVID-19, and received Unemployment Compensation through the rest of the year.
I generated an initial 2020 return using TT on March 8, 2021, which included the unemployment benefits as income, but I chose not filed at the time since the deadline had been extended.
Our Adjusted Gross Income on line 11 of this initial form 1040-SR was $18,182, which is not much above the low end cutoff, below which she would be forced to enroll in Medicaid rather than Obamacare.
We very much want to avoid that, and besides, this is her last year before moving to Medicare.
It is now May 6, and intending to go ahead and file, I opened TT and let it update. I asked it to review our return, and after it finished, I found that our AGI had dropped to $7,982 due to line 8 of Schedule 1; an Unemployment Compensation Exclusion of negative $10,200.
I have searched the internet for what this might mean to her eligibility for the ACA, but have found nothing specific to our situation. Most of it has to do with people whose benefit will increase because of this UCE, but nothing to do with people who might be in jeopardy because of it.
How will an AGI that has been reduced by the UCE to a level that would not have qualified for the ACA before the American Rescue Plan be treated?
Will my wife be kicked off of Obamacare and forced to enroll in Medicaid?
Are we going to end up owing the IRS repayment of the Premium Tax Credits we have already received?
Any suggestions about how we should handle this?
Thank you.
