Do Distributions from IRAs Count as Income For Subsidies?
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I went thru WAHealthplanFinder.org to find a health plan. Does my distributions from my IRAs (one was a 401k that was converted to an IRA when I wanted distributions and the other is a Roth IRA) count as income? It seems to me that those should be counted as savings, not income.
I do collect SSA and a small pension that amounts to $1383.87. They are also counting my $502/month for a total income of $1885.87/month to determine my subsidy.
So, do my distributions from my IRAs count as income when determining what my subsidy should be?
Tomasa Crayton
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deb
what if I move the money to a HSA would that still count as income
ObamaCareFacts.com
If you are getting a taxable deduction for your contribution, which you should, then it deducts from your income for things like tax credits (specifically, it deduct from your MAGI).
On the other side of this, if you take money out of an HSA for non-qualified distributions then it adds to your MAGI income and would likely result in less credits.
Ghassan Abbas
so if $70K was moved from Traditional IRA to a Roth IRA at the end of the year (2016) and the tax paid separately on this rollover, your MAGI will be affected? why should it, it is unearned income?
Will that $70K, affect Obamacare Health Credit (PTC) received in 2016: Meaning do you have to repay all the PTC credit at tax time (April 15, 2017), since that put you over 400% MAGI?
ObamaCareFacts.com
In cases where you pay taxes, on earned or unearned income, it counts toward your AGI and MAGI, and thus affects taxes and tax credits.
It is explained well here: https://ttlc.intuit.com/questions/3611494-does-a-401-k-to-ira-rollover-count-as-gross-income-against-my-obamacare-income-and-force-me-to-repay-all-13-000-of-the-government-aid-i-got-for-my-healthcare-premiums.
Giang Le
I’m 63 retiree and my income is a roll over Ira with social security income. Last year I paid $+231.37 for my premium with $250 deductible and 2250 out of pocket. But this year the price is rocket high $360/56/premium, $1250 Deductible and $5700 out of pocket.. How can I manage my life like that. If I take more on my Ira I will pay more for Health insurance get penalty and my ira end it soon. Needs help for that
Cyrus
I’m enrolled in a 403b Roth IRA. When I start withdrawing at age 59 1/2, would this count as income or even interest income toward eligibility of Medicaid or on the exchange subsidies?
Jamie Aliperti
Roth IRA distributions are not taxable. The answer should have said that the 401k distribution should count towards household income but that the Roth IRA distribution should not.
ObamaCareFacts.com
Thanks I updated the answer to make it more clear. It can be a tongue twister to describe that tax implications of 401k’s and Roth’s, in both cases, for withdrawal and contribution, it has to do with if the income is taxable at that point or not.