On paper, I owe $3400 for premium tax credit. Any recourse?

For the first 7 months of 2019, I made $11.50 an hour working 16-24 hours a week as I was going to school. For the last 5 months of 2019, I started my 2 new jobs out of school. As soon as I started my new jobs, I canceled my health marketplace insurance, because my new job offered insurance. Those 2 new jobs collectively bumped my yearly AGI to 45,000 and I'm expected to pay back the premium tax credits given to me, even though I canceled the marketplace insurance for the last 5 months of the year . I'm trying to find out if there is any recourse for this. I don't think it's too fair that I am expected to pay back on the 7 months I had it, because during that time I genuinely made no money and actually needed it. I feel victim to a flawed system.

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  • 1 month ago

    Your recourse is to LEARN THE LAW, and accept that you legally owe the amount.Note: You are not expected to pay back the credit for the 7 months you had 'Obama care'. You are expected to repay the amount you were not eligible for based on your ANNUAL income.

    Yes, you made PLENTY of money. In fact, I make significantly LESS than your income and was never eligible for the credit.

  • Anonymous
    1 month ago

    thats what having 5 jobs are for how in the world are you going to pay that off with one job ? better start looking for 4 more jobs

  • ?
    Lv 7
    2 months ago

    There is no recourse.

    You received funds to pay for medical insurance so that you would be covered. Your income increased to a point where your total earnings for the year were enough that you should have been able to pay for your own insurance without a subsidy, so you get to repay the funds.

    Think of it as a loan. At the beginning of the year the only way you were possibly going to be able to obtain health insurance was with help from the Federal Government. So they loaned you $3400 to buy insurance. There was no interest and no loan fees. If your income doesn't increase then the loan is forgiven. If your income increases then you get to repay the loan - no interest, no fees, just give back the $3400. You still benefited from the program because you were able to buy insurance BEFORE you could afford it on your own.

    Maybe that isn't any comfort, but that's the way the law is written.

    You aren't the first person to get caught up in this nor will you be the last. By my calculations you're earning something in the neighborhood of $90k/ year with your new jobs, so as much as it sucks, you're going to have to just write the IRS a $3400 check and move on. The good news is that unlike the people who are keeping their ACA supplements and renewing their plans for next year, you will have employer sponsored health insurance and a big fat paycheck.

    Congrats on the job, and sorry there isn't some hidden provision I can point you towards that would eliminate some of that tax debt.

  • Anonymous
    2 months ago

      "and actually needed it"    And you got it.

    "I feel victim to a flawed system."   Without the system you would have had NO medical insurance during those seven months.   Maybe you should be grateful for a system that gave you what you couldn't provide for yourself even if it's flawed. 

    You started earning about 8k/month.   You don't get taxpayer subsidized medical insurance when you make that much.   

    You could give up your 8k/month income and keep $485 of taxpayer subsidies instead.  Sound good?

    For the love of God, how did we raise such self-entitled people?

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  • ?
    Lv 7
    2 months ago

    The US tax system is based on an annual income.  You made more money annually therefore you don't qualify.  It's fair because you actually did make the money and you received a large subsidy in the same year.   You got insurance and you basically received a free loan to help pay for that insurance, now it's time to pay up.   The more money you make the more taxes you will pay.  Consider yourself very lucky you made 45,000 on a year you didn't even work for 7 months!   As the government considers the entire year they see you do not deserve these large government subsidies since you ended up making so much money. 

    I know it may be hard to accept this answer, but look at it this example.  Suppose a stock trader makes no money for 11 months and then makes a million dollars in month 12.  Is it really fair for this millionaire trader to get government subsidy meant for poor people for 11 months or should he have to pay it back?   Obviously more extreme than your situation, but it's the same type of scenario. 

  • Anonymous
    2 months ago

    Your state might have free tax advisors. You should consult with them and call the irs to answer more questions. The irs does a loan program to pay monthly.

  • Anonymous
    2 months ago

                          

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  • Judy
    Lv 7
    2 months ago

    Sorry, it just looks at your entire annual income, so you're stuck.

  • 2 months ago

    Your subsidy is based on your annual salary not per month.

    If you falsified your annual income or earned more than expected, you have to pay back the overage.

    Yes, it's a flawed system.  Don't know why it exists at all.

    Eliminate the ACA so that we can get cost containment and better healthcare services.

  • Anonymous
    2 months ago

    Any overage would be figured by your tax software in March or whenever.   I would think if you cancelled it for the last 5 months the amount you owe might be 5/12s less.

    I bet if you call the 800# they could tell you better.

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