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Posts related to the IRS and the Premium Tax Credit reconciliation, MAGI, Form 8962, for Covered California ACA.

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Inputs for calculating your health insurance premium assistance amount

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The formula for determining how much premium assistance, also known as the Affordable Care Act premium tax credits (PTC), to lower your monthly health bill is complicated. At its core the formula uses the inputs of your age, MAGI, a special contribution percentage and the annual cost of the Second Lowest Cost Silver Plan. Plugged into the formula, these inputs determine if any Advance Premium Tax Credits (APTC) will be awarded to reduce your health insurance premium. Some people are surprised to learn they don’t qualify for any APTC even though their MAGI is below 400% of the federal poverty level.

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$13,000 tax bill triggered by Covered California income advice

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Mr. Polk learned from his CPA on April 7th, 2015 that he owed $13,230.43 for the repayment of excess APTC for 2014. The CPA had properly taken the Covered California 1095-A and completed IRS form 8962 Premium Tax Reconciliation. It was clear on form 8962 that the addition of the Polk’s social security retirement income and tax-exempt interest had pushed the Polk household income over 400% of the federal poverty line.

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Filing amended IRS tax return because of incorrect 1095-A

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The IRS issued guidance on whether tax payers should file an amended return once they receive a corrected 1095-A from either the federal or state exchange such as Covered California. You do not need to file an amended return based on your corrected Form 1095-A.  This is true even if additional taxes would be owed […]

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IRS says file with bad Covered California 1095-A

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  In updated Frequently Asked Questions regarding the ACA Premium Tax Credits and federal tax returns, the IRS says tax payers can file with what they know are bad 1095-As issued by Covered California. The tax payer will then have the option to file an amended tax return if they are entitled to a larger […]

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IRS Publication 974, comprehensive ACA premium tax credit guidance

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Publication 974, released by the IRS in March 2015, is a fairly comprehensive review of the ACA health insurance premium tax credit rules. Its release is long overdue as many Americans have struggled to understand how the Advance Premium Tax Credits (APTC) afforded by the ACA interact with their federal taxes. Publication 974 addresses many different […]

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IRS waives Covered California incorrect 1095-A tax collection

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The Treasury Department has decided to expand their February 24 announcement waiving collection of under reported health insurance tax credits to states that are running their own Marketplace exchanges. Tax payers who already filed their tax returns using incorrect 1095-As issued by Covered California will not be subject to the collection of excess Advance Premium […]

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New ACA special enrollment may not prevent 2015 penalties

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It’s great news that both Healthcare.gov and Covered California are offering a Special Enrollment Period (SEP) for individuals that are becoming aware of the individual mandate penalty for not having health insurance. Unfortunately, there will still be individuals and families that enroll during this SEP that will get hit with the IRS Shared Responsibility Payment (SRP) for […]

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Where is the Covered California 1095-A?

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.Covered California states that they started processing the 2016 1095-As as of January 5, 2017. The form should be in the consumer’s Covered California account Summary>Documents and Correspondence>CalNOD62A_IRSForm1095A_2016 by the end of January. The form should also be mailed out to consumers at the address listed for receiving mail.

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The silver lining for repaying excess ACA tax credits

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One of the common complaints during tax season for individuals and families who are set to receive a federal refund is that the government got to use their money for a year before refunding it to them. Now, households who have to repay excess ACA tax credits find themselves in the situation where they got to use a […]

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IRS penalty relief related to ACA tax credits

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  The IRS has issued additional guidance on ACA Advanced Premium Tax Credits and relief from certain penalties associated with the taxpayer receiving excess tax credits from a health insurance Marketplace. IRS Notice 2015-9 Penalty Relief Related to Advance Payments of the Premium Tax Credit for 2014 outlines how some taxpayers may not be subject to the penalties […]

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