1095A premium tax credits reported life change

[micahb18]

Hello!

My estimated income that I reported to the HCA marketplace changed during the year. I won a small amount on the lottery and because of that I was no longer entitled to receive my premium tax credit.  I reported that life change on the market place and it was reflected in my 1095a. I paid the full amount for the insurance beginning in September and this was reflected in the 1095a. However when I entered the information from the 1095a into Turbo tax it read my situation as I has been ineligible for the tax credit for the ENTIRE YEAR and asked me to pay back the FULL AMOUNT for the year even though my life change occurred in August. I can't seem to fix this error. Anyone know what to do in this situation? Thank you!

[CatinaT1 · Accepted solution]

Unfortunately, the Premium Tax Credit is calculated on an annual basis, not a monthly basis.  So even though you changed your income amount half way through the year, you had received Advanced Premium Tax Credit for the first half of the year.

When you file your return the Premium Tax Credit is reconciled against your actual annual income and situation.  Unfortunately this is correct.

[micahb18]

Wow Catina! Thank you so much for helping me. I never expected such a quick response...

Of course the answer is terrible and I don't understand. I was eligible for half the year and don't think its fair that I have to pay  back the credits i was entitle to especially since I reported the life change myself. Any suggestions on how to reduce what I have to pay back?

and moving forward and I think I know the answer to this but since I paid several months of the full premium and I  received no tax credit then can I report that amount paid as a health care expense and deduct it?

[BillM223]

1. You are not the first taxpayer to be surprised by this, but Catina is correct - the instructions clearly calculate the PTC on the annual income. To change it, you would need to contact your congressperson.

2. "can I report that amount paid as a health care expense and deduct it?" You should check your Schedule A (if you show one), because as I recall, if your PTC is adjusted to your detriment, then the amount of the adjustment is automatically transferred by TurboTax to Schedule A for exactly this reason. 

[micahb18]

Wow thanks so much Bill! I'm amazed at all the help I'm getting!

Thank you!!