1095A - 1099C causing a large repayment

[meffordtax]

I have a client that got a 1099-C form from a past due cancelation of debt. It was a significant amount and has caused a large repayment on the Premium tax credit. Since this was not actual income is there something I can do to avoid them having to pay this back.

[IRonMaN]

"Since this was not actual income"

Just curious.  If it isn't income, what is it?  

But you could have an out.  Was the client underwater with debt so that some or all of the debt could be excluded from unactual income?

[Just-Lisa-Now-]

Have you gone through the canceled debt worksheet to see if maybe Insolvency would help? 

Theres an Insolvency worksheet in there that I have clients complete to see if maybe we can make some or all of it non-taxable.