ACA Issues

[mcb39]

Am I the only one having ACA issues this year.  Nobody has posted a word on the ACA board.

[Lee B]

2 minutes ago, mcb39 said:

Am I the only one having ACA issues this year.  Nobody has posted a word on the ACA board.

What kind of issues?

[mcb39]

Married in October 2022; forced  to file MFJ and pay back all of ACA because income is too high.  We have tried every which way to resolve this, but instructions are sketchy.  MFJ puts them over the 400% and MFS is not allowed according to ACA.

[Lee B]

You may be trying to close the barn door after the horse is already gone.

[Abby Normal]

Why doesn't everyone call their tax pro before tying the knot? Timing is everything. Perhaps wedding tax planning should be a thing.

[Max W]

3 hours ago, mcb39 said:

Married in October 2022; forced  to file MFJ and pay back all of ACA because income is too high.  We have tried every which way to resolve this, but instructions are sketchy.  MFJ puts them over the 400% and MFS is not allowed according to ACA.

This happened to a client of mine about 5 years ago.  They had closed out a small investment account they had and it put them about $300 over the 400% FPL. They ended up  with a $17,000 PTC penalty.    There has been no remedy for that up until this year when it goes into effect for TY's 2023-2025.

Those with incomes at 400% of the FPL and beyond will be able to obtain coverage for no more than 8.5% of their household income. 

 

[TexTaxToo]

On 2/2/2023 at 9:17 AM, mcb39 said:

MFJ puts them over the 400%

The provision Max refers to is for TY2021 thru TY2025 - there is not a 400% "cliff" for those years.  They may still qualify for PTC.

(Originally, it was for TY2021-22 only as part of COVID relief, but was extended it to 2025.)

[TexTaxToo]

And make sure you consider the "Alternative calculation for year of marriage" in Pub 974.

[mcb39]

5 hours ago, TexTaxToo said:

And make sure you consider the "Alternative calculation for year of marriage" in Pub 974.

Oh yes, we certainly did.