Originally Posted by tomfitz94
I qualified for a tax credit on my health insurance based on my low fixed (social security) income...I received the tax credit MONTHLY...in July I made a significant withdrawal from my IRA which increased my income for 2014. Now I am working on my 2014 taxes and discover that I lost the tax credit based on my income and have to pay it back on my 2014 return.
MY QUESTION IS...CAN I TAKE THE TAX CREDIT FROM JANUARY THROUGH JUNE AND PAY-BACK THE CREDITS TAKEN AFTER THAT JULY WITHDRAWAL...OR DO I HAVE TO PAY-BACK THE ENTIRE YEAR????
it depedns; since it turns out you underestimate your 2014 income and you already benefited from premium assistance payments, you’ll have to pay them back to the IRS when you file your 2014 income taxes. The amount you’ll have to pay back depends on your 2014 family income. If your 2014 income is below 400% of the federal poverty level, there is a cap on the amount you’ll have to pay back, even if you received more in assistance than the amount of the cap. However, at higher income levels, you’ll have to pay back the entire amount you received, which could be a lot. When you apply for Obamacare through your health insurance exchange, you need to estimate what your family income for 2014 will be. If you estimate it will be below 400% of the federal poverty level for a family your size, you will be eligible to receive a subsidy to help pay your monthly insurance premiums. The amount of the premium assistance is based on your estimated income and the amount of your health insurance premiums. This premium assistance can be worth thousands of dollars per year.please contact an IRS enrolled agent/ CPA in your local area fro more info in detail.