It says I must pay back the entire tax credit I received for health insurance because of my husband's income, but we were only married for the last 4 months of the year

[garrettjunk123]

I had a low income, and therefore qualified for a good tax credit on health insurance.  I got married in September of last year, and now they're saying I need to pay back the entirety of the tax credit because of my new husband's income.  This doesn't seem right.

[HollyP]

Yes, it is right. Unfortunately, this is how the law was written where your total household income is used to determine the Premium Tax Credit (PTC). If you get married during the year, it often reduces or eliminates the PTC, which means you need to repay part or all of the advance credit that you received.

It is based on your annual JOINT income, so that is where the problem lies.  Although TurboTax automatically does an "alternative" calculation to see if it will reduce the repayment, it often does not save anything and you must repay the advance credit that you received.

Tax Tip: If you are able to contribute to a deductible Traditional IRS before April 15th, it MIGHT reduce the amount of the Advance credit that you need to repay.  Filing as Married Filing Separately sometimes will reduce the repayment as well, however, in many cases your overall tax would be higher so that would not be a good option.