ACA "subsidy cliff" for 2021 tax returns

Forum|Forum|4 years ago
October 19, 2021
2 replies
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Per article below, the ACA subsidy that must be returned if AGI is over 400% of poverty level, maxes at 8.5% of the AGI. Is this a correct reading? (In 2020 returns, enacted retroactively, the excess subsidy did not need to be returned at all.)

https://www.healthinsurance.org/obamacare/beware-obamacares-subsidy-cliff/

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Best answer by qbteachmt

From: https://www.irs.gov/pub/irs-dft/i8962--dft.pdf

"For tax years 2021 and 2022, taxpayers with household income that exceeds 400% of the federal poverty line for their family size may be allowed a PTC."

qbteachmtAnswer

Level 15

From: https://www.irs.gov/pub/irs-dft/i8962--dft.pdf

"For tax years 2021 and 2022, taxpayers with household income that exceeds 400% of the federal poverty line for their family size may be allowed a PTC."

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TaxGuyBill

Level 15

American Rescue Act, Section 9661:

‘‘(E) TEMPORARY RULE FOR 2021 AND 2022.—In the case of a taxable year beginning in 2021 or 2022, subparagraph (A) shall be applied without regard to ‘but does not exceed 400 percent’.’’.

It increases the potential credit too. And if a person collects Unemployment, their income is considered to max out a 133%.

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