Concern about 2024 Estimated Tax Payments

[jaxgab]

I have a question about Form 2210, Schedule AI, Part 1, Line 18 and the Form 8962 Premium Tax Credit. In my own case, I will get a 2024 Premium Tax Credit and a small tax refund if I don't do a IRA to Roth IRA conversion during 2024. That would obviously mean I don't need to make any 2024 estimated tax payments.

If I do a 2024 IRA to Roth IRA conversion on 12/31/2024, however, it will completely wipe out the 2024 Premium Tax Credit. But I also want to show that tax credit on Form 2210, Schedule AI, Part 1, Line 18 in column (a), (b) and (c) to justify not making any estimated tax payments for 2024/Q1, 2024/Q2 and 2024/Q3. My 2024 tax return will likely reflect a Premium Tax Credit of $ 0 and the claimed Form 2210, Schedule AI, Part 1, Line 18 column (d) amount would be $ 0.  That would allow me to make a single 2024 estimated tax payment on 01/15/2025.

1> Does anyone think this particular strategy is flawed?

2> Will Turbotax software help me prepare the Form 2210, Schedule AI and let me enter amounts on Part I, Line 18 in column (a), (b) and (c) and and $ 0 in column column (d)? 

[Vanessa A]

That will not work that way.  Are you insured through the Marketplace?  If so, the credit goes directly to the insurance company.  You do not get it. It is not counted as a tax credit like the EITC or other refundable credit. 

 If you are not getting it paid to the insurance company every month to cover your premiums, then you would be telling the IRS that you did not believe you were eligible for it, so there is no reason to enter anything at all for the PTC on form 2210.

What other income do you have?  Self-Employed?  Employee wages? 

If you do the conversion on 12/31/24, and the rest of your income was earned evenly, pay the taxes on the income as you earn it to avoid taxes.  Then when you do the conversion, you will need to pay on 1/1/25 for the conversion. 

[jaxgab]

My wife is insured by the Marketplace, but there are no credits being paid directly to the insurance company.  For many years, we have elected to not estimate our income at the Marketplace web site site (www.healthcare.gov) and not get any monthly advance payments paid to the insurance company.  Why?  Because the Marketplace isn't designed for taypayers like us, because our taxable income will most likely be whatever number I want it to be.

We do have some income, primarily in the form of retirement annuity payments from the United States Railroad Retirement Board.  Those payments alone will let us qualify for a Premium Tax Credit (PTC) on our tax return.

You are incorrect when you claim "... the credit goes directly to the insurance company. You do not get it."  We claim the PTC (which is a refundable credit) on our federal income tax return.