Repaying Tax Credits After Getting a Job – Story

My story is simple. I was retired at 62, applied for healthcare, received a reduced premium and a waivered amount for coverage due to my income. I decided that social security was not enough income, so I planned to go back to work. I cancelled my coverage when I accepted a job. 30 days later, my healthcare benefits from my job started. There was no overlap in Obamacare coverage and my new coverage. I was shocked when I did my taxes to find out that I was penalized $600.00 for 3 months of coverage for Obamacare – which I NEVER USED! The end result is that 3 months of coverage ended up costing me $1500.00 because I opted to be covered by my job. I feel this was unfair, since I was covered during my period of retirement, but was penalized for getting a job, getting better coverage on my job, AFTER I cancelled my Obamacare coverage!

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I had the same experience. The healthcare marketplace didn’t tell me that if I got a job, my income for the year would be used against me. I was unemployed for 4 months in 2016, and now will end up paying about $1300 for that insurance I had when I was out of work, and my UC barely covered my living expenses. This is a total scam. They need to tell that to you upfront. I would never have purchased the insurance had I known it would cost that much down the road. I barely even used it, and would have been better off taking the tax penalty.


It’s important to remember that health care premium tax credits offered in advance through the Marketplace are based on annual income for the year you claim them. They are offered based on projected annual income, but given based on actual annual income. If your income goes up higher than you projected you’ll owe back tax credits, up to the repayment limit, based on total household income claimed for the year.

If you are between jobs we always suggest either accepting you may have to pay back credits or simply opting to claim them on the 8962 form at the end of the year instead of taking them in advance.

You are only paying back the credits you got that you didn’t qualify for, still the system can be confusing and leave a bad taste in ones mouth if they didn’t understand the implications when receiving the tax credits.

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