I have a client who worked for a hotel and was covered by the Company's Insurance for 3 months (Jan to March) but because of Pandemic, it resulted to temporary closure of the business. He applied to market place effective May to December, and was provided a 1095A covering 8 months period. In calculating Form 8962, because his total modified AGI is $52,592.00 in cluding what he received from EDD, his Household income as a percentage of federal poverty line is 401%., and calculated his excess advance payment of PTC in Part III is 3008.00. how could I reduce this amount, as I wanted to make monthly calculation as it states in Publication 5187 that TAXPAYERS WHO RECEIVE 1095-A HEALTH I NSURANCE FR MARKETPLACE SHOWING CHAN GES IN MONTHLY AMOUNTS MUST DO A MONTHLY CALCULATION TO DETERMINE THE PREMUIM TAX CREDIT IN SEC 2 OF FORM 8962. TAXPAYERS WHO HAVE CHANGES IN MONTHLY AMOUNTS NOT SHOWN IN FORM 1095A (FOR EX. A TAXPAYER ENROLLED IN QUALIFIED HEALTH PLAN BECAME ELIGIBLE FOR EMPLOYER COVERAGE DURING THE YEAR BUT DID NOT NOTIFY THE MARKETPLACE) MUST ALSO DOI A MONTHLY CALCULATION TO DETERMINE THIER PREMUIM TAX CREDIT. PLS HELP ME HOW TO DO THIS IN MY INTUIT.
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@Rogelio7_1951 wrote:because his total modified AGI is $52,592.00 including what he received from EDD, his Household income as a percentage of federal poverty line is 401%.,
[EDITED for my error, see additional comments later.]
In direct answer to your question, the program already does the monthly calculations (Lines 12-23 of the 8962), but it is still based on the annual income, not just the income from the months that taxpayer had Marketplace insurance.
But as Lisa mentioned, contributing to a Traditional IRA might fix things.
Would contributing some money to an IRA be an option to bring the income down enough to get below the 401%?
I had one guy saved $7000 APTC payback last year by putting $825 in an IRA.
@Rogelio7_1951 wrote:because his total modified AGI is $52,592.00 including what he received from EDD, his Household income as a percentage of federal poverty line is 401%.,
[EDITED for my error, see additional comments later.]
In direct answer to your question, the program already does the monthly calculations (Lines 12-23 of the 8962), but it is still based on the annual income, not just the income from the months that taxpayer had Marketplace insurance.
But as Lisa mentioned, contributing to a Traditional IRA might fix things.
Modified AGI is $52,591.00.
4. Federal Poverty Line .... 12,490.00
5. Household Income as a percentage of federal poverty line ... 401%
These are all taken from automatic calculation from Form 8962
Oops, I looked at the wrong numbers. Sorry about that.
He is actually at 421% (Form 8962 shows 401% for anything over 400%).
So 400% is $49,960. As Lisa pointed out, if the taxpayer can contribute $2631 to a Traditional IRA, that would lower his MAGI down to 400% (due to rounding, the taxpayer can probably contribute less than that). That will qualify him for the Premium Tax Credit. That is a great way for him to save a lot of money.
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