Proving once again that their is a great need for a sarcasm font...
DUH. This item is the next disaster waiting to happen.
Subsidy Clawback Abuse?
- Thread starter dgoldenz
- Start date
Proving once again that their is a great need for a sarcasm font...
DUH. This item is the next disaster waiting to happen.
Game on or a Joke !!
Consumers Whose Income Drops Below Poverty Get Break On Subsidy Payback - Kaiser Health News
One reader wrote: “What is going to happen? Will he have to pay back all of the money that he received for the tax credit since he no longer qualifies?”
The short answer is no. No repayment will be required. According to a Treasury Department rule, if the insurance marketplace estimates that someone’s income will be between 100 and 400 percent of poverty and it turns out that his income for the year is below the poverty threshold, the individual won’t be on the hook for any premium tax credits he received.
eCFR — Code of Federal Regulations
Consumers Whose Income Drops Below Poverty Get Break On Subsidy Payback - Kaiser Health News
One reader wrote: “What is going to happen? Will he have to pay back all of the money that he received for the tax credit since he no longer qualifies?”
The short answer is no. No repayment will be required. According to a Treasury Department rule, if the insurance marketplace estimates that someone’s income will be between 100 and 400 percent of poverty and it turns out that his income for the year is below the poverty threshold, the individual won’t be on the hook for any premium tax credits he received.
eCFR — Code of Federal Regulations
- 8,448
WOW! Thanks for the new APTC Eligibility tool, YAgents!
-ac
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RE: IRS Instructions for Completing Form 8962 - "Premium Tax Credit"
http://www.irs.gov/pub/irs-dft/i8962--dft.pdf
A couple of strange items...
1. Page 5 of the instructions (and YAgents post above) use the verbage, "The Marketplace Estimated that Your Household Income Would Be Between 100% and 400% of FPL". Since when does the Marketplace estimate this? Applicants enter their income projections...NOT the MARKETPLACE.
2. If you look at the instructions for completing line 6 (found on page 5 of this document), it says that "Applicable Taxpayers" below 100% of FPL qualify for the Premium Tax Credit. If you earn under 100% (or under 138% in Medicaid Expansion states), the Marketplace won't grant you a premium tax credit!
These IRS Instructions for the new Form 8962 verify that APTC will not have to be repaid for "Applicable Taxpayers" who ended up less than 100% of FPL. But they also seem to be allowing A.T.s who earned under 100% of FPL and purchased an Exchange policy without APTC (which is very rare for obvious reasons), to now claim the Premium Tax Credit at tax filing time.
Is there a way for agents to use this to our advantage with assisting those who are under 100% or 138% of the Federal Poverty Level?
ac
- 4,716
Pardon me while I do a little jig in my underwear.........I like it...I love it....I want some more of it.......ohhhh yeahhhhh
This is a loophole that is the size of the Atlantic Ocean for those who make below the threshold levels.
Since subsidies are based on next years income it is easy for anyone to say they will make over the threshold next year even if they haven't this year, it's just a matter of finding a job and working the hours.
I can't find fault with anyone who makes that estimate given that the law is dependent upon Medicaid expansion and many states have passed on that, leaving these people, who need help the most, in subsidy hell.
I will absolutely share this with my clients, I see no downside for them or potential liability for me in doing so.
Since subsidies are based on next years income it is easy for anyone to say they will make over the threshold next year even if they haven't this year, it's just a matter of finding a job and working the hours.
I can't find fault with anyone who makes that estimate given that the law is dependent upon Medicaid expansion and many states have passed on that, leaving these people, who need help the most, in subsidy hell.
I will absolutely share this with my clients, I see no downside for them or potential liability for me in doing so.
- 8,448
Speaking of Medicaid expansion states, if someone in one of these states ends up earning between 100% and 138% of the FPL, I wonder if they will have to repay any of the prior year's subsidy/APTC?
