Why Do I Owe Money for ObamaCare on my Tax Returns?
I had Obamacare for 5 months last year. I am filing my taxes right now, and after entering information into my form 1095-A, I ended up owing money! I am a college student who is working part time. This is the first year that I have had to pay money to the IRS. How is having Obamacare helping me? I didn’t even use the insurance which I paid for. Please explain to me and help me understand.
If you owe money on your taxes due to ObamaCare it's for going without coverage or an exemption for a given month, or getting too many tax credits up front.
If, in 2014, you only had adequate coverage for 5 months out of the year, you would have to pay the Individual Shared Responsibility Payment. This is probably the money that you noticed you ended up owing to the IRS.
If you owe money for Obamacare on your tax returns you may need to file the 8965 exemptions form. You need to claim exemptions for the months you didn't have coverage. If you can't claim exemptions for a given month, follow the 8965 directions for how to pay the fee. Also, if you got tax credits, and then claimed more income than you projected on your Marketplace application, you could end up needing to repay excess tax credits up to the limit.
As a college student, it's likely that you may qualify to remain on your Parents' health care plan (until you're 26) or to purchase a qualifying student group plan from your school.
Also, it's important to understand that health insurance is not something that you should plan on purchasing when you need it – the entire point is that, because you never know when you might suddenly accrue medical expenses, you should be sure to have coverage all the time.
For more information about how the Affordable Care Act helps you, please visit our page on The Benefits of ObamaCare.
I was told my monthly fee was $12.because my income was so low.for health insurance.
Now they are saying I owe 1200 plus a month. This is impossible my income was about 1900 a mth so how could my insurance be 1300 a mth. They refuse to admit they are wrong and are abusing my rights as a citizen and strong handing the IRS to take away from my lowly income of social security.
I will get my sister as a lawyer and sue. This is absolutely impossible.
That doesn’t add up. You may be just under the 100% poverty level and thus are being charged full price for some crazy over priced insurance. If you are talking about this showing up when you file you should re-check the math on form 8962 and 8965. At that income the costs you are talking about don’t make sense. This is true even with “repayment limits” for taking too many tax credits in advance.
There is a chance you are paying back the full credit, which you SHOULD NOT DO if you are under the poverty level. See here: https://obamacarefacts.com/advanced-tax-credit-repayment-limits/
I know how you feel. I owe money on insurance I didnt use as well. Now Im in a worse situation then before and for what? Nothing
These Fuckers I had health insurance all year. I got a .50 raise they say I owe 600 dollars more for a different in income. I hope they all get fucking shot. Im about to stop paying taxes all together and start buying bombs and guns
This is just another way to keep the poor in a financial bind. If I would have known I would have to pay even after obeying the law,I would have just paid the fine. This sucks. A poor person just gets stepped on everywhere they turn
I agree. I can’t make ends meet as it is. I’m still paying federal taxes from last year. Now and added $1,200 on top of that. This is so wrong to treat us this way.
I just finished both my brothers taxes and mine. After entering the 1095-A form for both of us, we both went from getting over 1,000 back to owing 400!! We both are poverty level and are paying for Obamacare, so that we wouldn’t get a tax penalty! How long left until this guy is out of office?
Well double check your 8965 and 8962 forms. Form 8965 should have a few exemptions you can take at that income.
I have no home and I’m living on my mom’s couch, working two jobs just to get by paying my damn student loans. I get my taxes back and owe $650. That’s two weeks worth of my pay. More if you take out my bills. I do the right thing and get your scam of an insurance and get penalized for it??? Fuck off.
Insane. I was all for Obamacare until I got slapped with a $2000 bill at the end of my taxes. I’m getting punished for following the rules: getting obamacare when I was unemployed when I needed it to not pay the fine… and then punished again when I got a job!
Next year, I will just pay the fine, and I will tell everyone I know to do the same! >:(
On some level you are only paying back tax credits you borrowed, but, I haven’t met a person yet who felt good about paying back tax credits. You did do the right thing though. To be clear, $2,000 bill means your total annual income took you above the poverty level after deductions.
I only made 1300 this year and they say I owe 600 im way below poverty can anyone explain this to me ?
Why do we have to pay back the tax credits? This makes no sense at all. It’s a Scheme.
Because you borrowed them from the Treasury Department and the Government (essentially) sold bonds to cover you. So if your income changed, you owe money back. Just FYI the short-term GOP plan is to increase this burden, not reduce it… although the ultimate goal is to trim back and change the tax credits, so things could look different in the end.
But Trump doesn’t pay taxes and billionaires hide money overseas yet you come after people like us who were going to be penalized for not having insurance. You give us an amount we’ll pay based off of previous income then say “you made too much now you owe us” based off of YOUR assessment. I’m not paying a damn thing back. After all said and done I get $85 back. Don’t sit here and type out excuses to people and say too bad. It’s too bad that we can’t just have health insurance. People get cancer and go poor because of it yet have to come up with money for insurance. What’s the difference between Obamacare and Donald Trump? NOTHING. Scammers. Schemers. Rot in hell.
Just to deflect a little, we are an independent site trying to help people. So we aren’t excusing away anything, I voted for Bernie and am working with my fellow Washingtonians (state of Washington not the capital) to try to get single payer passed here.
I didn’t have breaks in coverage this year. I was unemployed for half the year and opted for Obamacare for 3 months to save money. I was just hit with a $600 penalty for the 3 months I carried coverage through obamacare. How is this possible?
This could happen if your total income resulted in you having to repay tax credits, this could also be a result of not taking the proper exemptions on form 8965. Did you have access to employer coverage for a month you took tax credits? That could be another cause.
This is absurd, absolutely ridiculous.
What is America? Where is a damn democracy?
Good, diligent working class is getting killed with this Obama care. WHERE IS THE CARE? My parents worked at minimum wage. They are both going to be 60 this year. They followed the law and got themselves Obama care even though they just cannot afford health insurance and were willing to pay out of pocket. Ok, so during 2015 they thought the plan worked for them. They paid about $3 a month. Even though they still had to pay almost everything out of the pocket because of the deductibles. But ok, we all thought they had a break.
Then what? Came this year and they are hit with over $1,700 owed to the IRS. WHY? WHY? Is this what you guys do to your citizens? I’m absolutely speechless. How can you treat the working class this way? We didn’t need the damn insurance but you took our right away and call it a privilege. What happened to America? Do you want another Civil War? Because you will get it with this rate. People cannot afford it and when people are too angry to keep our mouths shut, more than words will come out.
I AM ABSOLUTELY ANGRY. Where is the justice? Why do you keep hitting on the working class? WHY?
100% understand this anger. I actually spent a good deal of time discussing it here. https://obamacarefacts.com/2016/04/05/the-psychology-of-obamacares-advanced-tax-credits-and-repayment-limits/
Ended up owing tax for insurance I couldnt even use. This seems like a scam. Just leaving my 2 cents
we’re taxed on everything… our income, what we buy, sell, eat, rent, use and where we live-
now we hear a lot of promises, ‘keep your doctor’ and ‘everyone can afford insurance under this plan’… all garbage, all lies-
forced to purchase private, for profit insurance… forced. whacked with penalties, huge tax bills… but only for the lower classes-
the wealthy stash $Trillions offshore and pay nothing, huge corporations get hundreds of millions of dollars in tax incentives, sweetheart deals and subsidies, while the lower classes foot the bills for everything-
I just filed. I owe 41$ plus 747$ obamacare fine for a total of 788$ I am sending a check for 41$ and they can piss off for the rest. There is nothing they can do about it according to the law, they took the teeth out of the law before it was passed.
That is true, they can without future refunds, but you won’t get in any sort of trouble outside that. You 100% have the right to make whatever statement you wish.
As a type 1 diabetic I thought, oh what a good idea this is, no matter what its called. Looking at my tax’s now, and finding I OWE money somehow because of this load of s%#t!! ObamaCare and the entire IRS department should hopefully catch Ebola soon !! Dump them all in the ocean, crooks
Sorry you had the experience, as someone with a preexisting condition the ACA can really benefit you, but you need to figure out the loops and hoops to avoid pitfalls. Seems like you fell in to one, what did you owe money for?
Need some big help and don’t have the money to find someone to help me… On the Marketplace Health Insurance website, it clearly states that when your salary increases you should inform the Marketplace right away to avoid a penalty payment at the end of the year.
I did exactly that. From January-May 2015 I only worked part time and OVERESTIMATED my income in the marketplace to avoid any penalty fees. In June 2015 I was promoted to full time, cancelled the Marketplace health insurance and took health insurance from my job. Now because they are saying my “overally yearly income” was more than I stated, I have to pay back a huge amount… $1500. But I was only making more for HALF of the year, and that HALF of the year I WAS NOT provided with health insurance from the Marketplace. How can I fight this? They are only looking at my yearly income and not looking at the fact that I was only covered for half the year at that pay rate and then I cancelled it.
This trips up a lot of people, it can be rough when you are employed only part of the year but make enough to owe back tax credits. The only thing i’ll say is that when you owe back tax credits you always owe back money you would have had to otherwise pay.
That happened to me last year. I filed an amendment, they in turn charged me an extra $750 in federal taxes that i still owe $300 of.Now hit with another $1,200.. I just want to cry.
if i used tax credit get insurance how long i will owe to the goverment? will it roll ower?
Tax credits don’t roll over, they are based on annual income. What you owe or is owed to you is based on household size and household income per tax year.
That’s BS. I pay 52 dollars a month for Obamacare. Now I get hit owing $600 dollars. I would have gone without insurance then. So this health care isn’t so cheap. I paid $650 for the year and another $600. That’s 1,200 dollars. How is this affordable healthcare ? I could have paid this amount Anywhere. I don’t understand how this helps the mid-low class. I had no clue I was going too be charged at the end of the year. Hurry get your health care fast so you don’t pay attention to the money you will pay in. What a scam. The tax return i count on is gone. What a joke.
No No. Obama cares penalizes the worker for sure . The Public doll People who are seasoned at having handouts pay there way , Rent, Health Insurance, Food Stamps,
Phone, Ect, Are the ones that the law helps not the worker. Worthless insurance then
they take your tax refund . Its a bunch of Bull Sh t . Thats for sure .
President Trump Will fix this Crime against the working class people
who don’t use the government dole too survive.
I am a healthy 24 year old male. I only got health insurance recently because of the crazy idea that if I choose not to I would lost money anyway, so with that logic I decided to get cheap health insurance just to please the big business gods. I signed up with Obamacare last year and thought oh great it’s affordable. Little did I know I was actually just borrowing money! I work 60+ hours a week with multiple things that I support and with below 30K a year I make my life work. I have never even been close to owing money when I filed my taxes until I got Obamacare. Great idea… make the poor , poorer. The rich, richer. Why don’t we just take the ridiculous profits the health industry makes and recycle that? We are not a logical country though. I will do my best to let everyone I know to not sign up for this load of crud.
You aren’t the only one upset, that is for sure. But, just keep in mind the tens of millions of sick and suffering who depend on a working healthcare system with access to coverage. A 24 year old making $30,000 is going to get cost assistance, but not the type that makes coverage dirt cheap. However, no one is offering you better, and your employer is not offering you coverage. So you are in a unique situation, to fix the situation for you will require others to make a sacrifice. You would really need to do some critical thinking to understand the whole thing and choose an appropriate moral position.
That and… the money you get back in taxes comes out of your nation’s pocket. Always a give and take.
I completely agree. I’m a healthy 28 year old girl and did not know that signing up for Obama Care was such a scam. I actually used my check up I was supposedly covered for too and ended up with a lab testing fee of over $600 and now with this fee in my taxes and my monthly premium I’m spending an absurd amount of my money for someone who is fit and healthy when I DON’T EVEN MAKE A LOT OF MONEY. I’m so mad and feel helpless.
That is frustrating, no doubt there… just, I know this is an impossible message to convey and we are just using words here… but like, “ObamaCare” didn’t do this, it is “the healthcare economy” in action that is the main character of the story.
As a 28 year old you should have pretty decent access to cost assistance unless you are really rocking it in terms of income.
But general advice, and this will be true with TrumpCare, always consult your insurer before you get a test… Then if they try to charge you $600 appeal and appeal until they concede or you go down swinging.
Our income did not go up, but we now owe $1500 back to Obamacare. We are already struggling to pay the $250 a month for coverage. We have not been able to the use the insurance (besides 2 well child visits) because our bronze plan has a $12,000 deductible.
Obamacare has been such a burden on our family.
What a crock of it !!!! YOU are penalized for no insurance and you are penalized for using Obamacare either way I feel that my fixed income is penalty enough !!
My husband was unemployed starting the end of 2015. January 2016 we purchased marketplace insurance for our family and used the available tax credit. I specifically asked two different Marketplace representatives if in calculating our taxes for 2016 only the income we received while on the marketplace ins would be considered in calculating if we owed back some of the credits, both said yes. Since we were confident that my husband would be back to work at some point in 2016, it would stand to reason that our income would go up. I wanted to make sure they were only going to consider what we made (the lower income) while needing the marketplace ins. Of course here it is tax time and the rep’s were wrong. We had MP Ins for 9 months and employer ins for the last 3. The government is looking at our entire income for the year, not just the lower income we were making while using the marketplace ins. Of course we made more than we claimed when applying for MP ins, but we were told that only the period of MP ins would be used in calculating our responsibility. Thanks Obama!! Also, not sure if most people know of not, if you have poverty level income, you get no tax credits towards insurance, you just get an exemption from paying the penalty for not having ins. So Obamacare really does NOT do anything for those who can’t afford Ins, as it was advertised…
I think that is what happened to me as well!
I taught for the first 5 months of the year and made “good” money. The last half I have hardly scraped by, and that’s why I got on Obamacare…now I’m not making any money AND having to pay back the “tax credit” which apparently was less of a “credit” and more of an unknowing loan with the devil.
I think It is Bull that I complied with the rules and paid a hefty monthly premium every month and still have to pay back over 1,200 in federal taxes. It would have been cheaper for me to just gone without insurance and paid out of pocket. This is so unfair. Now i understand why the Republicans want to dismantle Obamacare. It only benefits people who don’t work.
An issue that we have come across as we’re filing our 2016 taxes is that the second lowest cost silver plan (SLCSP) premium that is shown on our Form 1095-A (Part 3 Column B & on the online tool) is significantly lower than the SLCSP premium that was shown at the time of enrollment – resulting in a change in tax liability for us of over $1,000!!
This problem may create a huge tax liability for many taxpayers who didn’t expect it. Have someone check your Form 1095-A SLCSP – not with the online tool that the Marketplace provides, but have them check it against the SLCSP that was provided at the time of enrollment.
THEY ARE TAKING 1500 FROM MY TAXES FOR OBAMACARE…DO I HAVE TO FILE THIS ON MY TAXES
Obamacare robbed me for my refund. 1st off. I make roughly 30,000$ a year. I was penelized for not having health insurance, Because of the amount of overtime i receive !?i work 6 day weeks with 40 hours of overtime BECAUSE high turnover rate!not to mention an employee simply deciding not to show up to work automatically keeps me stuck at work not reaping majority of benefits of paycheck uncle sam takes 1/3 of paycheck. On regular 40 hour work week i couldn’t afford it. I Obamacare is terrible !!!!!!!! Either way the government has us financially and mentally on deathbed.
They want to make us a fucking enemy for not paying extortion come and get me better bring yoru fucking army
I needed Obama care at the beginning of the year when I had a job that I did not make much money. When I finally got my real job where I am now making money I stopped Obama care and now have insurance through my job. Of course my income is going to be higher now then I projected on my healthcare plan because my job changed. Why do I owe money?
I am currently making $800 a month, and I qualified for an obamacare plan for $36 a month . Now that I filed my taxes it automatically took about $400 out of my refund money and sent it to obamacare. for someone else, this wouldn’t be a big deal…but for me, this is a whole extra apartment payment. I don’t understand how i can be charged, or why! When I found out, I refused to file the taxes until i can figure out what the heck is going on. Being single, i was already taxes very high! I can’t afford to pay $400 to obamacare when I’m already paying every month for insurance that no one accepts. I think the tax penalty would have ended up costing me less in the long run when you add my monthly premium and this invented fee!
I am so, so frustrated. I thought I was doing everything right – my employer offered insurance but it was too much ($550 a month for someone bringing home $1600 after taxes and a husband whose idependent contracting job doesn’t offer insurance). So marketplace. I over-estimated how much I made, talked to marketplace advisors. The only plans we could afford were ones with $6000 deductibles, so basically, we were paying $250 a month for nothing.
I go to do my taxes today, only owed $53. Great! And then I put in the health insurance numbers. I owe the government $1503! I’m a preschool teacher – that is an entire month’s pay – yes, I’m sure my landlord will be fine with my not paying rent for two months.
It’s not fair. It’s just not fair. I’m trying to be responsible, haven’t started a family that I can’t afford (although apparently the boost your tax refund considerably). I’m sorry, I’m just so frustrated. You try to do the right thing and you just can’t get ahead even a little bit.
I signed up for Obamacare, made payments up until June so I understand the penalty for the credit given. But why do I still have a bill from the insurance company for the missed payments. For the first time I owe over $400 to the IRS and my first bill starting this January from the insurance company was over $500 past due?
I used Obama Care (me and my wife) only 5 months last year and I believed Obama Care is a “goverment support” to people with low incomes but Now I think is only a “goverment insurance” and you need to pay all services. Cover was too low and now I lost all my tax refund because Obama Care need money and they take my money. For me, Obama Care is bad solution and they didn’t say you clear details about dedutions in taxas next year. They take your money and say you why, after you lost your money. It’s just an insurance business that you’ll pay with your next year’s fees. This year I pay taxas because Obama Care create cost for me and all pass years I had my retorn taxas without problems.
Folks, I refused to buy oboma care, always paid cash for my , medical emergency, at the hospital, payments for walk ins is between 150.00 to 375.00, you can ask for a cash price.
Got slammed this year in my tax return for 1700.00 dollars for the penalty. So now im claiming everything I canon my w4. and max my pay check so at the end of the year I get nothing back from the state or federal. This is illegal and unconstitutional. For the government to take your hard earned money, there ia no reason why the government should be mmeddling in our private lives.
Just so the scum who put this together know, Americans don’t want to have to get a loan from the government to pay for health insurance throughout the year!!!!!! This is insane…..maybe try and make it truly affordable instead of faking like it is….we already have medical bills to pay off even though we have insurance…..we don’t have the extra money to pay back your God damn tax credits….if you give us the credit you shouldn’t expect a cent back when we’re already dealing with insurance that f**king sucks and costs a fortune….
Just want to make it clear that Obamacarefacts.com did not design the system, or the Affordable Care Act. Sometimes people get confused about that, but your frustrations are definitely a common theme in our QA and comment threads.
I had Obamacare for 6 months out of the year- i was at a job paying x amount yearly- that is what i used to apply for Obamacare when filling out my income. Than in July i got a new job, higher paying & offered insurance. I cancelled obamacare & joined the new insurance. When i filed this year, the IRS said I owe because I made more than what I filled out when originally signed up for Obamacare- They stated that even though I did the right thing & cancelled it, the rules are written that you cannot make more than what you stated, am i supposed to know i was going to get a higher paying job?
THIS MAKES NO SENSE.
Where does it state this?
I moved over the summer and started a new job. My old job paid for health insurance and paid well – my new job not so much and does not offer insurance. I got a tax credit to help pay for insurance since I no longer make that much. I just did my taxes and they say I owe hundreds and hundreds back! I don’t understand. My financial situation has changed drastically this last year and so now, because I *used* to make money – that was supposed to somehow help me pay for insurance in my current situation??? Someone please explain.
I spent $3,000 on insurance premiums and $5,000 on out of pocket copays for doctor’s visits and prescriptions … now I apparently am going to owe another $3,000 to pay back the credits I received?! How is that fair? How can 2 people have to spend $11,000 on health care for a year? It would have cost me the same if I didn’t have insurance and I paid everything out of pocket (actually, maybe a little less because I would have been able to use the discounted drug program for my prescription). Obamacare fucking sucks. Single payer is the only rational way forward. If you seriously think people in other countries spend 18% of their income on healthcare you’re fucking delusional. How is 18% of your income “affordable”?!
I too am very angry about having to pay federal taxes. I’m at the poverty line, I pay a monthly premium and now I have to pay over $600 to the IRS. And I’ve had insurance all year!!! It just doesn’t make any sense.
My wife and i just got our tax return back from the CPA, and we also showed owing big time because of being on the subsidized State health plan. When we started I was not working, then I began making to much money and at tax time we got hit on our Federal tax return for all the subsidy money paid from the previous year. My advise is , if you can stay out of the exchanges. In reality they are funded by Uncle Sam and if you go over the allowed income limit they will expect full payment back of subsidy paid for the year, not just back to the date you began making more. They look at your final income tax reporting. Stay off the dole if you have an alternative i.e. your employer etc.
I owe just under 600 dollars on 2016 and missed open enrollment for 2017 so I am completely screwed, this is wrong, my wife and I are below the poverty level.
You might be able to qualify for Medicaid or in very special circumstances special enrollment.
Mostly though, things seem like they are going to get bad before they get worse.
Trump just made open enrollment shorter and special enrollment stricter.
Beginning of the year we change the our taxes to show I was making more. Later in the year I took a different job and was making less. No one can answer this question what is it going to take to not owe money because of this horrible healthcare plan
I’m jus I’m just commenting I’m wanting to know if I had t I’m just commenting I’m wanting to know if I had a 1095-b form that I had to fill out for ObamaCare for 5 months and they charge me something different how could I get the remainder of my money?
People who are having issues with 1095s are advised to contact the Marketplace and IRS. They are the ones who deal with these.
I was getting back 870.00 now I owe 1,300.is this because I started collecting social sercurity. Also I had to pay things that weren’t covered,
nobody told me that if you made to much money to live as a single mom that I would wind up paying $6000 an as it is I don’t get sick or go to the doc I just had the Obama insurance just to have insurance I wish I would have been told in advance
It doesn’t, I to only needed Obama care for 3 months didn’t use it either… I took money from my retirement fund to add to my downpmt on a house , to lower the monthly pmt. Now I owe Obama care over 500.00 on my taxes… It sucks I am a healthy person and they forse us to have insurance if we need it or not
I retired and my wife and I signed up for the marketplace insurance. I had my taxes done and now owe $22,000! The accountant said this is all from the health insurance. How can this be possible?
It is really hard to get in a situation where you would owe that much. The only two ways I see are this:
1. You make a lot of money and didn’t get health insurance and thus you owe the price of a Bronze plan… and somehow you are in a region where this is the price (still don’t think this adds up).
2. You got a Gold plan (or a high premium plan), you got a lot of tax credits, but actually you qualified for none and have found yourself owing back $22k in tax credits.
It is hard for me to even imagine a situation in which these are the case. I would do a double check of this information, because it seems too high for tax credit repayment or fees.
I bought Obama care for 6 months because our insurance co. Dropped all retires. Did not want to get fined for not having coverage. After filling taxes I now have to pay the same amount I payed for coverage back to the government. Now I understand why people voted for trump. Shame on you Obama and the government. This country is so f’d up. Screwing over retired people. Poor people. Middle class people etc.!!!!!!!!!!!!!!!!
What makes me sick is too see young adults who don’t work and even sell weed for a living and they get free Obama care and free operations etc. the hard working people trying to do right to make ends meet and pay fir Obama care are getting hit up at tax season and shit over by the government. We all need to sue or leave this country. Please everyone vote out every senators in the next election!!!!!!!!!!!!!!!!!!!!!!!
The assumption that people who don’t work get free ObamaCare is partly false. In states that expanded Medicaid to all adults, adults with low incomes qualify for Medicaid despite their life choices. ObamaCare expanded Medicaid in some states, so in these states what you say fits the bill (for those who happen to not work and potentially sell weed, I assume you mean illegally).
However, the main thing the ACA does is give tax credits to working families (you have to have an income, so you have to in most cases have workers in your family). So I think of the working family who still lives in poverty, and I think we shouldn’t lump them in the same category as someone who refuses to work.
That said, super annoying that many who work hard don’t have affordable quality healthcare even after assistance. Not sure who is up for election who is going to fight for universal healthcare or another solution like that, but fingers crossed those are the types that we replace these Senators with 🙂
I found out on my 2017 tax return that I owe the IRS nearly SEVEN THOUSAND DOLLARS because of Obamacare. Here’s what happened. I was on Obamacare in 2017 from Jan. to June and I qualified for a subsidy, as I did for all of 2016, because my only income was Social Security. When my 65th birthday arrived in June of 2017, I dropped Obamacare, as Medicare automatically kicked in. Now, the BIG HOWEVER. Also on my 65th birthday I began collecting my pension from 38 years at my job. That basically doubled my annual salary for 2017, so they say I was not eligible for the subsidy and had to repay in full. But for the time I was on Obamacare (Jan. to June) I WAS eligible. So I was penalized for FUTURE earnings. Who could possibly have known that??? Had I known, I would have dropped Obamacare altogether for those 6 months, switched to a much cheaper plan, or even delayed my pension. $7000 is a huge bill for a retired person to have to pay.
This is one of the major problems with the Affordable Care Act. Sure, you go tax credits and then owed them back, that is really all that happened. That is logical… but man does it sting, leave a bad taste in ones mouth, and even present some real problems when it comes to affordability!
There are no words really. All I would say is “this is why we need more reform from both sides, not just repeal plans, defenses of the ACA, and deregulation.”
I was out of a job for 5 months and finally found one, my wife had a terminal brain tumor ( Glea Blastoma). it took 6 months to receive any health care, we were caught without any insurance because we moved out of the area, My received Obama care in 2017, and I pulled out of retirement to buy a car( 23,000) so I filed my taxes and now I owe 11.000 dollars to the I.R.S to pay back all of my wife’s insurance
This can be really distressing, I understand, but taking $23k in taxable income means that you add $23k in taxable income to your tax bill… that means you price yourself out of assistance… that means you owe back assistance taken in advance.
This is you owing back credits borrowed from the government to pay for health insurance to treat something we can all agree was worth it…
… but look, I know it stings regardless.
I’m a fan of a more robust universal system (one that doesn’t let someone with a brain tumor go without care for half a year based on income and current job status), and I am a fan of raising the cut-off limit (so making more money doesn’t mean getting a tax bill that defeats the purpose of earning)… but you know, these days there isn’t a lot of talk of expanding healthcare in this way from most circles. In fact, we often seem more concerned about how much we tax the ultra wealthy than how some bizarre rules keep a middle class family from earning or seeking care. Ah well though.
For today, under this current system, one must make sure to avoid taking taxable income in a year they need assistance (as absurd as that may seem, it is what these thresholds for assistance mean in the system we are in).
Anyway, paying back that much money stings, very sorry on a practical level.
NOTE: That said, take another look at your exact situation. 5 months without a job, plus the lump sum, plus only having healthcare part of the year, that is a situation with too many moving parts for me to offer a specific answer. I gave the general answer, but when it comes to $11k I would strongly suggest double checking every figure to make sure you really did price out (make too much) and not make too little (and then maybe you aren’t counting your taxable retirement account income correctly). Simply put, when your tax program says you owe a lot of money, and your situation is complex, it is time to see a tax professional.
Another one who has been stung. I thought that once I got a full time job with insurance and cancelled my policy through the marketplace, that was my income as far as Obamacare was concerned. Unfortunately, I just got socked with $4000 that I owe the IRS because once I got my FT job my income was $3,000 over the limit for a subsidy. I dipped into savings for the last two years, did not take unemployment in order to get by. Had I known that I would have to pay this (who can guess their future income when underemployed or unemployed) I wouldn’t have even gotten the insurance. I never even used it! I was just starting to get back on my feet. With what I paid for health insurance while working part time for the last 2.5 years, I could have put a down payment on a house.
Really, I’m not as upset with the government/IRS, as I am with the fact that some insurance company CEO is the one who is benefitting from this. The government had to pay off these rapacious insurance companies with my money. At least if my money were going towards someone who REALLY needed it, it wouldn’t be so bad.
Fair points. I am not a fan of the subsidy cliff myself, I don’t think it was an elegant solution to a real problem. Among other things, I think it severely overestimates the ability to pay of those making just over 400% of the poverty level. Thanks for sharing your story.