Premium tax credit repayment

[Janitor Bob]

Does this sound normal?  Based on what I assume was my client's income estimate, they received an advanced payment of the premium tax credit of $4940.  When I enter all of their income (Just 1099-R and Social Security, zero taxable income), The 8962 is stating that clients should have only received an advance payment of $3,630....Meaning they need to repay the difference of $1,310.  I need to be able to explain this to what I am sure will be devastated clients....they have no money to pay this.  Is this normal?  their only sources of income were $31,977 Social security and $10,153 retirement....zero taxable.  Obviously, income in this case includes taxable and non-taxable?  Is it just a case where taxpayer underestimated their income and is now paying for it?

Am I doing something wrong or is this common?

Not looking forward to this conversation.

[jklcpa]

It might make sense. It is based on MAGI, not taxable income. They may have included only the taxable portion of the SS benes when applying or possibly underestimated the pension income, for example, if they took extra out of an IRA. Is they income consist with the 2014 year? 

You should also check to make sure that the numbers being reported on the 1095-A are correct. I've seen one that was in error so far and waiting on a corrected form.  At the level of income you indicated, I'm getting a calculation that their monthly contribution toward the premiums is just over $300 (form 8962, line 8b).  The calculation also depends on the premiums for the plan they chose and the second lowest silver premium. On an annual basis, what are those figures?

[Janitor Bob]

3 hours ago, jklcpa said:

It might make sense. It is based on MAGI, not taxable income. They may have included only the taxable portion of the SS benes when applying or possibly underestimated the pension income, for example, if they took extra out of an IRA. Is they income consist with the 2014 year? 

You should also check to make sure that the numbers being reported on the 1095-A are correct. I've seen one that was in error so far and waiting on a corrected form.  At the level of income you indicated, I'm getting a calculation that their monthly contribution toward the premiums is just over $300 (form 8962, line 8b).  The calculation also depends on the premiums for the plan they chose and the second lowest silver premium. On an annual basis, what are those figures?

Thanks...I also get $302 as their monthly contribution.  that gives them a $363 monthly premium tax credit allowed.  The problem is that based on client's income estimate, they were given an advance tax credit of $494/month.