Waiting to Do Life Change Until Taxes Filed , Tax Credit Reconciled?

Dec 13, 2015

  1. yorkriver1

    yorkriver1 Guru

    Likes Received:
    I have a few small business Schedule C clients who want to wait until they know their 2015 income before doing a life change for 2016. There are others dreading their kids rejected by Medicaid/CHIP last year going off their plan until the application is accepted/rejected again, and want a longer time line for CHIP app processing, since they didn't renew close to 11/1/15.

    I want to have a good answer to this question: If the "old" tax credit is applied to their coverage for 1 to 3 months in 2016, won't the 2016 tax return credit the proper amount for the whole year? Then, in 2017, they would owe TC back or receive refund, but based on their actual 2016 income and calculated for how much they should have received each month?

    One made the suggestion that open enrollment on Marketplace might be easier if done shortly after tax filing time. A rep at Marketplace mentioned they hear that frequently.
  2. cadylou

    cadylou Guru

    Likes Received:
    It's ridiculous that they don't do it after taxes are filed. Plus - the expense involved in the "true up" on the IRS end and the constant anxiety over the whole issue for the client. As I've said many times - methinks that the people who devised this whole system have never met anyone self employed in their lives. . . . .
    cadylou, Dec 13, 2015