Actual 2024 income below estimate during healthcare enrollment. Why is TT saying that 1.2k of health insurance discount must be paid back??

[D33zTaxes]

I'm looking into this on behalf of a family member who is using TurboTax. The ACA health insurance marketplace is supposed to have a straightforward mechanism of subsidy and how that subsidy gets adjusted at tax time: if actual income is different than initially projected, then the subsidy gets recalculated and the difference has to be paid back or is added as a tax refund.

I downloaded the "2024 Marketplace Eligibility Notice" that is available for this person's account, which lists the estimated 2024 income.

Actual income for 2024 is actually lower than the projection during sign-up.

So, then why is TurboTax saying that some of the subsidy needs to be paid back??

I'm extremely confused! Is anyone able to help and explain this?

[DavidD66 · Accepted solution]

TurboTax just makes the calculations using the information that was entered.  I suggest you, or the taxpayer, check to make sure that all information was input accurately.  The advance payment of the Premium Tax Credit (PTC) is not just based on projected income.  A big factor in determining the PTC is the family size.  If the taxpayer indicated that their household would be larger than it actually was, that would have significant negative impact.  

[D33zTaxes]

Thank you. Yes, I did not realize the part about the family/household size having an effect. Looks like that is exactly the cause of the discrepancy.