ACA Excess Advance Premium Credit Repayment - Sale of Business Assets

Forum|Forum|6 years ago
May 12, 2020
11 replies
40 views

Client and husband operated a Schedule C business until July 2019. Both turned 65 in 2019 and went on Medicare, but had ACA exchange policy with premium credits calculated for part of the year. When business assets were sold and business closed in 2019, no adjustments to income were made for the health insurance premium. Now with return completed, there is a substantial premium credit repayment. Taxpayers were advised that there is a "work around" because the sale of business property was a "one time deal" OR that there is an option for requesting a recalculation by IRS. I have found zero evidence of either of these options - but maybe someone else knows more than I do about that.

Any suggestions anyone?

THANKS!

ProSeries Professional

This topic has been closed for replies.

Best answer by TaxGuyBill

As George mentioned, there is not an exception for repaying the Advance Premium Tax Credit.

The first thing to try is to see if contributing to retirement accounts would lower income below 400% of the Federal Poverty Level (which will limit the amount of the repayment).
If that doesn't work, see if filing as Married Filing Separately will help anything (it may lower one or both spouses to under 400%).
If that doesn't work, try combining #1 and #2.

George4Tacks

Level 15

There is an appeal for the higher medicare premium for a life changing event. That may be what the client is confusing with the repayment that they are experiencing.
https://www.hhs.gov/about/agencies/omha/the-appeals-process/part-b-premium-appeals/index.html

Answers are easy. Questions are hard!

Just-Lisa-Now-

Intuit Community Champion

@George4Tacks wrote:
There is an appeal for the higher medicare premium for a life changing event. That may be what the client is confusing with the repayment that they are experiencing.
https://www.hhs.gov/about/agencies/omha/the-appeals-process/part-b-premium-appeals/index.html

Ive had 2 different clients try to appeal this medicare increase that happened due to selling a rental property and both failed.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

sjrcpa

Level 15

I tried it once and failed. Client sold his home in Northern VA where he had lived for over 50 years. There was a very large taxable capital gain, a once in a lifetime event.. No dice.

The more I know the more I don’t know.

T

TaxGuyBillAnswer

As George mentioned, there is not an exception for repaying the Advance Premium Tax Credit.

The first thing to try is to see if contributing to retirement accounts would lower income below 400% of the Federal Poverty Level (which will limit the amount of the repayment).
If that doesn't work, see if filing as Married Filing Separately will help anything (it may lower one or both spouses to under 400%).
If that doesn't work, try combining #1 and #2.

qbteachmt

Level 15

"Taxpayers were advised that there is a "work around" because the sale of business property was a "one time deal" OR that there is an option for requesting a recalculation by IRS."

This Advisor is confusing IRMAA and ACA. Which means that person should not be listened to for anything, because that is a basic understanding you should have before giving anyone advice. And whoever helped them submit for the Credit obviously did not guide them for ACA "life changing events" follow up.

Don't yell at us; we're volunteers

Sign up

Login with SSO

Let's get you signed in

Login with SSO