premium tax credit

[haskovec]

I have a client that had a premium tax credit and at the end of the year took $22000 out of his IRA making AGI $85000. This caused him to pay it all back. Now he owes $22380 to the IRS. He is married. Would they be able file separately for this year. Rough figuring then they would owe about $13000. I believe I fill out 8862 on both of them and on the bottom split it 50/50. Do I use the 1095A numbers on both people. Husband was first and wife second on original.

[TaxGuyBill · Accepted solution]

Yes, filing separate and allocating it 50/50 works.

Another thing to looking into is if they can contribute money back into a Traditional IRA (which will lower MAGI), either on a Joint return or on separate returns, to trigger the repayment limitation.