Are we still liable for 1095a fees if we dropped ACA insurance as soon as the new job started? If not, how should our TurboTax return reflect that?

[Kraorh]

We were on ACA coverage at the beginning of the year, based on the income and cost-of-living that my wife and I then faced.

[Coleen3]

Unfortunately, yes. You are expected to report to the Marketplace any change in circumstances. Even so, the way the law is written, the credit is based on your yearly income.

[Kraorh]

This is super weird. When we got insurance in January, we had no way of knowing that our income would change in September. Even so, we informed HealthCare.gov of the change of circumstances, and ended our coverage through them to reflect that. If we had known they would assess how much we owed for coverage based on what we'd make a year into the future, we wouldn't have gotten coverage through them, since the full rate is around $550/month for two healthy adults, which would be hard to afford even with the new job. It would be one thing if we had kept the artificially cheap plan when the new income kicked in, but we did everything to avoid that. (Plus, we moved to a new state, so we couldn't have kept the old plan even if we wanted to.) Something seems seriously wrong here.

[Coleen3]

I completely understand. This is from the Form 8962 instructions.

Advance payment of the premium tax credit (APTC). APTC
is a payment during the year to your insurance provider that pays  
for part or all of the premiums for a qualified health plan covering
you or an individual in your tax family. Your APTC eligibility is
based on the Marketplace’s estimate of the PTC you will be able
to take on your tax return. If APTC was paid for you or an
individual in your tax family, you must file Form 8962 to reconcile
(compare) this APTC with your PTC. If the APTC is more than
your PTC, you have excess APTC and you must repay the
excess, subject to certain limitations. If the APTC is less than
the PTC, you can get a credit for the difference, which reduces
your tax payment or increases your refund.
Note. The Marketplace determined your eligibility for and the
amount of your 2017 APTC using projections of your income and
your number of personal exemptions when you enrolled in a
qualified health plan. If this information changed during 2017 and
you did not promptly report it to the Marketplace, the amount of
APTC paid may be substantially different from the amount of
PTC you can take on your tax return. See Report changes in
circumstances when you re-enroll in coverage and during the
year, earlier, for changes that can affect the amount of your PTC

[Kraorh]

Coleen, thank you so much for the detailed and thoughtful response here! This exactly the kind of information I was trying to research. Based on what you said, I think we should be in the clear, and it'll be a matter of having this accurately reflected on our amended return. You wrote, "If this information changed during 2017 and you did not promptly report it to the Marketplace, the amount of APTC paid may be substantially different from the amount of PTC you can take on your tax return." That's just it: we DID promptly report it to the HealthCare.gov folks. We explained to them in September that we were ending our coverage because my wife got a new job that was paying substantially more and included employer-provided insurance. That's reflected in the 1095a, with the September column being a much smaller, pro-rated dollar amount, and October-December being "0." I have a separate 1095c form for the new insurance that began with the new job in September, but TurboTax says that it doesn't want/need the information from this document.

[Coleen3]

That is correct. Information from 1095-C is not reported on the return. The IRS does receive a copy of it.

[Kraorh]

Okay... so then... what should I do at this point? TurboTax's software insists that I owe around $1500 because of the 1095a issue, but based on what I did with HealthCare.gov, reporting the life-change at the time it happened, and switching insurance, it seems I should not owe the $1500.

[Coleen3]

There is no place on the Form 8962 to account for your situation. You can see the form and calculate it by hand for more understanding. https://www.irs.gov/forms-pubs/about-form-8962

[Kraorh]

Coleen, I was so afraid you were going to say that. I've been pouring over 8962, and at times wondered if one needed a professional background in accounting to understand everything here, but so far, I've been coming up more or less empty. The individual I spoke with at HealthCare.gov mentioned, in an off-hand way, that she has a professional do all her taxes, and I sort of envied her for it. There comes a point here where I'd wish I could just explain all this in a letter or over the phone, since the forms and software don't provide much room for nuance or complication. I'll follow up on the link you provided, and hopefully that has something I can make use of. Again, thanks for everything you've provided here; it is very much appreciated.

[Coleen3]

It was my pleasure.