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What Happens if I Overestimate My Income?

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    Busyhero

    But what if I accidentally overestimate my income, and end up earning too little to qualify for premium tax credits? Will I have to pay back all that money to the insurance company?

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    Wang Pei

    similar question, my filing status has changed from single to head of household, the effect is:  the obama care i have is silver plan which has the income requirement above 138% fpl.   my agi fell off 138% FPL with a different filinng status, Do I need to payback all the credits? I don't find the place on IRS tax form to state this situation. 8962 did not test for 138% threshhold.  Thanks.

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    CM

    I lost out on premium tax credits because I over estimated my income so I think your article needs to include some more details.

    My situation was that I applied for CT marketplace insurance for the first time in 2018. I used prior year income which was a great earnings year. Income was >400% above the poverty line. Unfortunately, income went to zero in late 2017 & very low for 2018. My final 2018 AGI was a negative number. I still paid my insurance premiums with saved income and credit cards. I couldn't lose my insurance and thought I would be able to reconcile at tax return time. [Now I know, I should have called the marketplace and told them about my change of income but as I said, it was my first year doing this and I thought this was how it was done. I thought the reconciling came later.]

    I had my taxes done by a professional and she said I made too little money for the PTC (premium tax credits). But, but ... that is the problem, I made too little money and I need the premium tax credits. 

    If you look through the form we use to reconcile, FORM 8962... Using 2018; Line 6 - See instructions if you entered less than 100% Income as a percentage of federal poverty line. (Remember mine was a negative number.)

    Line 6 instructions: You do not meet the requirements if no APTC was paid for your coverage. 

    So, I didn't receive any Advanced Premium Tax Credits on my premium because my income was too high. I can't reconcile and get Advanced Premium Tax Credits because I didn't have any paid on our behalf. I could not get a tax credit as this article tells you. If your income is 400% above the poverty line for your household size. I would pre-review Form 8962 and its instructions. And if your income level changes tell the marketplace. Don’t be like me. 😭

     

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