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Old 10-06-2015, 06:32 PM
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Join Date: Oct 2015
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Can CANCELED DEBT (Other Income L-29) be excluded when computing 8962 Premium Tax Credit?

My wife and I are self-employed. She has a marketplace policy.

After spending days running the worksheets and steps involved, I am way OVER the 400% poverty line.

This is because I have CANCELED DEBT income of over $28K that shows on L-21 of my 1040! I am trying to find out if this canceled debt MUST be included as income on the 1040 when calculating my Premium Tax Credit? It just does not seem "fair" since it is NOT part of our Sched C income (so was not part of our qualifying questions from Marketplace) and resulted when we partially paid off our credit cards with borrowed funds to eliminate our credit cards. What a bonehead move!

BOTTOM LINE: Can I NOT show CANCELLED DEBT INCOME on LINE 29 of 1040 to compute my 8962 for Premium Tax Credit?

Thanks so much for any help!


Last edited by taxwacked : 10-06-2015 at 06:45 PM. Reason: Typo in Title


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