mcb39 Posted January 23, 2015 Report Share Posted January 23, 2015 I think I did it right; I pray I did it right. Problem is that gal only had 1095-A insurance from June through December. The rest of the year she was on State insurance. Her monthly advance payment of Tax Credit is pretty high and she has to pay some of it back. How does the Marketplace arrive at the estimated amount of credit. It is nearly half of the premium that she paid. She is a single gal with one child, but did have an AGI of 35,600.; which greatly decreased her EIC and added the excess credit back as a tax. This is so weird. Quote Link to comment Share on other sites More sharing options...
rfassett Posted January 23, 2015 Report Share Posted January 23, 2015 Are we having fun yet? The advanced credit was based upon her projected income, family size and insurance plan she was buying and how the income flirted with the poverty level or 4 times that number or something like that. She would have had the choice of taking the credit in advance or taking it with her return. Since she took it in advance, as you are seeing, she may have too much advance credit and have to pay some back. Don't cry too deep of a river for her. It was still a good deal for her. But your point is very well taken - this is so weird! By the way, you are seeing first hand how the preparation fees are going to be higher for those that can least afford it. And trust me when I say that I have, six times now while I have been typing this, got up and then back down off of my soap box. I am fighting hard to stay off that. 4 Quote Link to comment Share on other sites More sharing options...
joanmcq Posted January 23, 2015 Report Share Posted January 23, 2015 I played with an 8962 before I plugged some of my income into the return. At 38k for a single 54 year old with no dependents I was getting about half of my premiums paid back with a credit; over 3k in credit. I was very surprised at how high the credit was. and 400% of the poverty rate was much higher than what was in the calculator I used to determine if I should even buy through the marketplace. So the credits can be quite high. Then I put in more income..... 2 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted January 23, 2015 Report Share Posted January 23, 2015 I think I did it right; I pray I did it right. Problem is that gal only had 1095-A insurance from June through December. The rest of the year she was on State insurance. Her monthly advance payment of Tax Credit is pretty high and she has to pay some of it back. How does the Marketplace arrive at the estimated amount of credit. It is nearly half of the premium that she paid. She is a single gal with one child, but did have an AGI of 35,600.; which greatly decreased her EIC and added the excess credit back as a tax. This is so weird. You don't give yourself enough credit. From your description, it seems as though you are correct. This is going to happen frequently for clients that buy insurance from the marketplaces. They "estimate" income to establish the subsidy. Then we, (the bad guys) get to tell them that the IRS is going to snag some of the refund due to the differences between estimates and reality. FUN FUN! 3 Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted January 23, 2015 Report Share Posted January 23, 2015 I think it may be even worse next year. If they signed up in November 2014 for 2015 insurance and subsidy, they are probably basing the income numbers on 2013 figures. Now, they should be able to go in and adjust it once we get their tax return done for 2014 but will they? I hope no one is holding me responsible for reminding them - I am NOT in insurance business. 5 Quote Link to comment Share on other sites More sharing options...
mcb39 Posted January 24, 2015 Author Report Share Posted January 24, 2015 The sad, sad, sad part of the weird here is that this is her first year with a decent income. Why? She has a deduction on line 33 for $2,232 paid out this year for interest on three different student loans. I can certainly see what happened if they based her income on 2012 which was over $10,000 less than it is this year. Yes, it was a very good deal for her but she got some bad advice. She is a good girl, working hard to make a living for her daughter and herself; after getting herself through school. She has lost at least 50 pounds since I saw her last year and it is not from dieting. I asked her; and told her that she looks great. She will understand, but will also be disappointed as her refund is earmarked for closing on a house that she wants to buy. I am not crying a river, but this is my first experience with seeing how convoluted this issue can be. We have plenty of time to find out how different every case is going to be. Thank you all so very much for your comments. Quote Link to comment Share on other sites More sharing options...
mcb39 Posted January 24, 2015 Author Report Share Posted January 24, 2015 It appears that the software is not pulling Column C correctly in Part 2 when there is only partial year coverage. It takes Box 8b correctly until you get to the last month and then it plugs the difference between the annual contribution (8a) and what has been used in the previous months. We can't find anything in the instructions to say that anything other than Box 8b should pull into Column C of the monthly calculations. Thanks. I also noticed that the calculations on line 23 for December were not populating correctly. I put in the correct amounts and lowered the payback considerably. I understand that there will be a fix for this next week; so be sure to check your 8962 carefully. 2 Quote Link to comment Share on other sites More sharing options...
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