I have a client who had insurance purchased on the exchange for Jan. 1, 2022 thru Oct 32, 2022.
She was single during this time.
In December of 2022 she got married.
She is filing a joint return with her Husband and because of his income it is coming out that she has to pay all of tis premium credit back.
Is there something else I should do or another form to file or is this couple simply (bleeped)
Best Answer Click here
They're generally bleeped. There is an "alternate calculation in the year of marriage" but in my experience it rarely makes a difference. Often the best you can do is file MFS to try to limit the repayment (but that generally has undesirable side effects.)
See if filing separately would help.
I tried that and as in most cases when you use married filing separately it does not work out.
on the 8962 part two is where you put date of marriage to recalculate the PTC
They're generally bleeped. There is an "alternate calculation in the year of marriage" but in my experience it rarely makes a difference. Often the best you can do is file MFS to try to limit the repayment (but that generally has undesirable side effects.)
@rcooley25 wrote:
who had insurance purchased on the exchange for Jan. 1, 2022 thru Oct 32, 2022.
it is coming out that she has to pay all of tis premium credit back.
Unfortunately, that is what happens when a person has health insurance for 32 days in October. 🤣
Just kidding.
Have you filled out the 'alternative' information? As Rick says, it often won't reduce the repayment, but it sometimes can.
If the repayment is large, you may also consider testing out if MFS works better. The MFS return may limit the repayment. Whether or not the overall result is better will vary though.
Another thing to check is how close is their income (or 50% of their Joint income if the alternative calculation applies) to a repayment limitation? If it is close, contributing to a deductible Traditional IRA to get below the poverty percentage threshold may limit the repayment.
https://www.irs.gov/instructions/i8962#en_US_2022_publink100010959
The married filing separate has been suggested by manyu of my fellow preparers but as said before it does not work. I tried it but no go,
Over the 54 years that I have been preparing tax returns the only time I have seen it beneficial to files married separately does not have to do with income taxes but has to do with student loan debt. By filing separately they pay more money in incomes taxes but it is a drop in the bucket to what they would have to pay toward the student loan if both husband and wife income become involved.
Not to rain on your parade, but I did a return for the same health insurance situation a couple of weeks ago and the tax savings were well worth the extra work filing MFS. I also put the MFS to work a couple of years back with the unemployment exclusion fiasco. So it does have its moments.
I am sre it does have its moments but the one I am envolved with right now is not one of them.
Dont worry about raining on my parade. If I get wet and the chills I will warm up by drinking more fireball.
You have clicked a link to a site outside of the Intuit Accountants Community. By clicking "Continue", you will leave the community and be taken to that site instead.