IRS took 1300 out of my 1400 dollar refund because of my health insurance

[nancytho]

Hello!

So I filed my taxes back in February with the first piece of paperwork from my health insurance (I ended up receiving another form weeks later). Got a notice from the IRS that I filed the wrong form so I needed to make the changes. I mailed in my fixed files and sent that in March. Then I call the IRS mid April where a rep tells me to call back mid May, I call and i receive 154 dollars out of my 1405 I was supposed to receive. Spoke with an IRS rep and she told me it was because of my health insurance paperwork. Does this make sense? Has this happened to someone else? I don't know what to do, I just wanted to ask and make sure this is normal lol Thank you for your time!

[ghost]

I assume your are referring to the marketplace insurance through Healthcare.gov. You should look at Form 8962 that you sent to the IRS to see if any subsidy money was over your allowed amount based on your income. If so, that money is returned to the government by taking from any refund due.

[Critter · Accepted solution]

When you completed the "fixed files" back in March and sent them the 1095-A & 8962 I bet you didn't look at the 1040 again ... if you did then you would have seen the change to the refund amount due to the excess premium tax credit that you had to pay back  ... if you had you would not be so surprised now.  

Look at the form 1040 page 2 line 46 and the form 8962 to see how the credit works.  If you had told the ACA you expected to  make $X for the annual income so the advance credit was based on that amount.    But you made  X + $$$  then you got too much of the premium tax credit in advance and you have to pay back the excess on the return.  You were supposed to alert the ACA during the year if the amount of income you actually made was different from what you expected so the credit could have been adjusted during the year so it was not a big shock on the return.  Sadly no one reads the fine print and many people have gotten the sticker shock.