You have to use the NOL you are entitled to.

You and client are taking tax advice from broker?

It's not tax advice.  But from the guy who will submit his insurance application, yes we'll listen to what he says.   Next step of course, would be to contact Covered California re: Does NOL really do that, and spend hours trying to find someone who actually knows what they are talking about.

https://www.ehealthinsurance.com/resources/affordable-care-act/all-about-the-covered-california-inco... may help. It refers to the use of MAGI

If the NOL takes him to below zero he should qualify for Medi-Cal.  He doesnt need the marketplace policy.

"and spend hours trying to find someone who actually knows what they are talking about."

Does this help: https://hbex.coveredca.com/toolkit/PDFs/Countable_Sources_Income.pdf

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@George4Tacks wrote:
And Covered CA should tell the client about Medi-Cal and get them signed up.

Technically this is not part of our job, but ....

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If you use the website to apply, it tells you.  Sounds like he's going through an insurance broker of some kind.

If he is signing up for insurance for 2021, the Premium Tax Credit for 2021 is based on his 2021 income, not his 2020 income.

If the NOL will be used up in 2021 and the taxpayer's income will be in the qualifying range, he will receive the Premium Tax Credit.

If you can show that projection to the health insurance person and that person is competent with such matters, your client may be able to receive the Advance credit to reduce his monthly payment.  If that person is not able to do it, your client may want to ask for his supervisor for assistance.  If the Marketplace still will not give the Advance credit, the full amount of credit will be received on his 2021 tax return.