Health Care Reform Subsidies Are Considered a Tax Credit and Taxable Income

Discussion in 'Health Care Reform Forum' started by STIBROKER, Oct 5, 2013.

  1. STIBROKER
    Offline

    STIBROKER Super Moderator Moderator

    Posts:
    10,014
    Likes Received:
    29
    State:
    Texas
    I have been trying to wrap my mind around this when I first saw it.......now....IF this is true......AND the sub's ARE considered taxable income.....and people are suppose to guesstimate what their income is going to be in 2014 will these sub's also be counted as income.....added to what they make....will it cause a claw back on everyone that takes a sub......

    ...btw..when I asked it on the broadcast last night "Austin Texas Affordable Care Act Live Town hall Meeting"....this was censored on the Link keye uploaded for re-watch...so to see the question asked uninterrupted you would have to be watching live on the net...
    Shopping Guide - Save money

    "How Your Savings Are Applied"

    If you qualify for a credit toward your health insurance premium, your savings are considered a tax credit and taxable income. This credit will be applied directly toward your monthly premium. Talk with a tax expert to decide if and how to use your credit. "


    KEYE...not broadcasting the rest of this question...



    part 2.....


     
    Last edited by a moderator: Oct 8, 2017
  2. AllenChicago
    Offline

    AllenChicago Guru

    Posts:
    8,354
    Likes Received:
    11
    State:
    Illinois
    I have "heard" other people saying that the APTC (subsidy) is taxable just like normal income, but I could never find an IRS publication with this wording.


    This could be a Trojan Skunk that the IRS slipped into one of its new RULES over the Summer...dry rules that the media never reads. Maybe BCBS-TX found this in one of them? If so, having to add the subsidy to one's income would turn even more citizens against the Affordable Care Act.


    Thanks for pointing this out STIBroker! It looks like people will have to estimate their subsidy based on their subsidized-adjusted income. Sounds like this could be an analogous to the dog chasing his tail.


    Are there any super analytical members here that can find this new IRS rule and share it with us?


    ac


    Edit: I just checked our BCBS-IL website. It says the same thing:
    Ref - http://www.bcbsil.com/health-insurance-shopping-guide/health-insurance-cost
     
    Last edited: Oct 5, 2013
  3. STIBROKER
    Offline

    STIBROKER Super Moderator Moderator

    Posts:
    10,014
    Likes Received:
    29
    State:
    Texas
    and subsidize them out of subsidies in the second year....does not cost the govt. a dime.....

    ----------

    That is why I tried to call The IRS on Oct 1....got a recording....do to the govt shut down we are closed....
     
  4. TXINSURANCE
    Offline

    TXINSURANCE Guru

    Posts:
    3,853
    Likes Received:
    21
  5. STIBROKER
    Offline

    STIBROKER Super Moderator Moderator

    Posts:
    10,014
    Likes Received:
    29
    State:
    Texas
  6. houcoogster
    Offline

    houcoogster Guru

    Posts:
    4,721
    Likes Received:
    0
    State:
    Texas
  7. Ann H
    Offline

    Ann H Guru

    Posts:
    6,997
    Likes Received:
    29
    State:
    Arizona
    The big issue here is that BCBS published it on their site. Blue Cross usually does not publish anything unless their legal department has reviewed it, and STI called them and they said their legal department approved of it. BCBSTX has the same parent company as BCBSIL, and both are showing the same statement.

    I have searched for documentation ever since STI told me about the rumor a few days ago, and I cannot find any documentation for it being income. Neither can any CPA we talked to. We even called the CPAs who produce seminars on PPACA for other CPAs and they had never heard of the APTC subsidy being income. However, that doesn't mean it's not hidden somewhere in the 20,000+ pages of regs. So if anybody has proof that it is true, please show us the source documentation! If true, this is HUGE. What a nightmare that would be.

    Now, we know that excess subsidy is taxable. So, for instance, if you get a $4,000 subsidy but you are only qualified for $2,000 of it, then the excess is taxable. (EDIT: I should have said "additional tax" instead of "taxable". It's also called a clawback.). But what STIBroker is talking about is more than just excess subsidy. The BCBSTX site says the whole subsidy is taxable income. Crazy, I tell you. Since when is a tax credit also taxable income?
     
    Last edited: Oct 5, 2013
  8. TXINSURANCE
    Offline

    TXINSURANCE Guru

    Posts:
    3,853
    Likes Received:
    21
    MLR group rebate checks are taxable because that money was never taxed.

    I suspect this is just a case of bad verbage on the site...
     
  9. STIBROKER
    Offline

    STIBROKER Super Moderator Moderator

    Posts:
    10,014
    Likes Received:
    29
    State:
    Texas
    Really...try 2 sites...Texas and Illinois....

    ----------

    and the thing that makes this a quagmire how are self employed that work on commissions ....contacts ....project income in 2014.....have a home builder friend that made $30,000 this year...family of 5....next year thinks he will do $175,000.....how do you deal with this....if anyone had half a brain would have set this up to were the sub's that you get for 2014 are determined by what you file for in 2013.....NO CLAW BACKS..... and so forth.....

    [​IMG]
     
  10. bluediamond
    Offline

    bluediamond Guru

    Posts:
    1,937
    Likes Received:
    0
    This question was asked at every seminar and we were told no it was not considered taxable income, by Florida Blue legal department who was present at one of them.
     
Loading...

Share This Page