When reporting my annual income to the Insurance Marketplace there was a discrepancy that his since been adjusted (I actually made less yet I updated it to market place but it hasn’t been updated in my 8962/1095 a documents so I’m not sure if I should wait to file or continue? Thanks for any feedback.
@mattjefferson09 I am not ncessarily following what you wrote. Let's go back to the beginning,
1) early in 2024 (probably late 2023), you ESTIMATED what your 2024 income would be and the premium was set based on that information.
2) You actually paid that premium all year - whether it was correctly or incorrectly calculated. You received the 1095a form.
3) when you complete your 2024 tax return, part of the process is "settle up". The software uses your ACTUAL income and goes through the SAME calculations that were used to estimate the Markplace premium. If the software determines your premium that you actually paid should have been lower, then you get a credit on your tax return for the difference. If the software determines your premium should have been higher, then you get a charge on your tax return for the difference in the form of additional tax owed.
4) .While this can be a complex subject, I personally do not see why the error would hold up your tax return. What you reported as your estimated income really doesn't matter. The tax return is comparing what you ACTUALLY paid in premium versus what the premium should have been when using you ACTUAL income. It does not care about what you estimated a year ago
does that help?
What do you mean your income has not been updated? Your tax return---your Form 1040 --- shows your income. The income you enter on your Form 1040 will be used in the calculations of your premium tax credit.
If you had health insurance from the marketplace, when you applied for the insurance, you gave healthcare.gov an estimate of how much income you would receive in 2024. They used that amount to calculate how much of the insurance premium would be covered by the tax credit and how much would be your amount to pay. So...you had some monthly amounts to pay, and the rest of the cost of having that insurance was paid by the government program.
If you ended up making a higher income than you told them you would receive, they re-calculate how much should have been paid by the program and how much should have been paid by you. And if your own share of the cost should have been more, they get it back on your income tax return.
If you actually had less income, you could even get some of the share you paid back on your tax return.