2 tax questions regarding Obamacare
2 Tax questions:
#1 We received a settlement in 2016 of $83,000 that we understand is taxable. Combined with our income that year, we had an adjusted gross income of $118,000. Because of this, we thought we were required to pay back all of our Obamacare subsidy (over $15,500) for our 2016 taxes based on the tax software we used. Yes, I have learned my lesson and will go to a professional next time.
However?.now we have seen this information:
?But You May Not Have to Pay It All Back?
If you receive a subsidy over payment, the amount you have to pay back will be capped with a limit based on your income level. For example, if you were overpaid for your subsidy amount due to incorrect income estimates, and your income is at 200 percent of the federal poverty level, the cap on the subsidy amount you have to repay is only $600. If it falls between 200 and 300 percent, the cap is $1,500; 300 and 400 percent, the cap is $2,500. You can even earn up to 500 percent of the federal poverty level and have to pay back no more than $3,500. This could be thousands of dollars less than the value of the subsidies you received. This was from the HSAforAmerica website.
Could we be due a refund because we did not need to pay the whole $15,500?
#2 We kept our 23 year old daughter on our BC/BS plan (through the exchange) plan in 2017 (January until the present). She was not making any income yet, and still in grad school, but there are two issues:
She will file taxes for 2017 with her husband and therefore is not a dependent of ours in 2017 and yet we have had her on our plan YTD. Question?.since she was not a dependent from January 2017 until now, what will the IRS do to us?
Do we need to pay the whole subsidy amount back? (meaning, will they take our entire subsidy back, and we will owe them about 15k?) Or, one fourth of it? (we are a family of 4 right now, without her included) or?..something else?
Will they prorate this in any way for the amount of time we have this family plan (January 2017 until now)
Thank you for your help.