Pay Back Health Insurance Coverage

[Caitybrd]

I had health insurance covered by the government because my income was low enough I qualified for it. After 6 months I received a new job in a new state. I canceled the health insurance since I no longer qualified. When I went to do my taxes it says I need to pay back ALL the health insurance they provided for me since my annually income was more than I had qualified for. The only reason my annual income had increased was because of the new job and by then I canceled the insurance. Do I have to pay back for the insurance I had even though I qualified for it at the time? Or is there some other way to fix this? 

[rjs · Accepted solution]

What you are paying back is the Premium Tax Credit (PTC) that you received based on your estimate of your income for the year. Yes, you have to pay it back. The amount of PTC that you qualify for is based on your total income for the year. If your income for the year is much higher than the estimate you provided at the beginning of the year, so that you don't qualify for any PTC, then you have to pay back all the PTC that you received. It doesn't matter why your annual income is higher than your original estimate, or that your income was low at the beginning of the year and increased later.

(If your total income for the year is less than 4 times the federal poverty level, there is a cap on the amount that you have to repay. TurboTax will automatically apply the cap if you qualify for it. But if your total income for the year is more than 4 times the federal poverty level you have to repay the full amount.)

[Critter]

Sorry....nothing you can do about that...those are the dangers of taking the credit in advance...you at least stopped it when your income changed it it could have been much worse.