Do You Have To Pay Obamacare Back
The amount one could owe the IRS may range from few hundred dollars to over a thousand. Many people have taken more premium tax credits in advance than what they are due, based on their final income. Having realized this, “Do you have to pay Obamacare back?” Of course, yes!
A lot of Americans who shop at the insurance marketplace will likely pay back some or all of their subsidies. Millions of people received subsidies for insurance premiums when they signed up for coverage on Obamacare exchanges.
Try not to worry! Apart from you, there are numerous people who underestimated their income last year and received a subsidy. Many people find it difficult to know when they will land a new job or what their income will look like a year after. While you should be informed that the government isn’t going to come after you, it is certain that you will pay back at least some of the subsidy on your taxes.
Paying Back Obamacare Subsidy: How it works
If you visit healthcare.gov during the open enrollment period to shop for health insurance, you’ll be asked to submit your estimated Modified Adjusted Gross Income (MAGI).
The income includes all taxable income, non-taxable Social Security benefits and some pension and annuity payments. With the MAGI amount, the FIRS will determine your eligibility for a subsidy as well as the amount. Those on the lower-income scales could be given a substantial subsidy.
The FIRS will cross check to see if your income submissions are different from your last reported income. They will also cross check your estimated income claims against your actual income at the time you file your federal income tax return. If get a subsidy for your health insurance while you earned more than you estimated, you may have to pay back some of the subsidy.
Do You Have To Pay Obamacare Back?
The maximum amount of payback depends on your actual income.
• Earnings between 100% and 199% of the federal poverty level will result in $300 for an individual and $600 for a family.
• Earnings between 300% and 399% of the federal poverty level will result in $1,250 for an individual and $2,500 for a family.
• Earnings above 400% of the federal poverty level will result in pay back all of the over payment
Steps To Take If You Have Underestimated Your Income
Below are the steps to consider if you’ve underestimated your income:
• Visit Healthcare.gov and log in to your account (or your state marketplace account) and update your information.
• Calculate what tax you owe.
After estimating how much it will cost you, start saving in order to pay back the subsidy. Note that it is highly important to estimate your income correctly (if possible). This will prevent you from acquiring unwanted expenses.
How to Avoid Paying Back Under-Estimated Annual Income
• If you discover any changes in your income during the year, report them to your health exchange.
• Agree to settle the total amount out of your own pocket during the year and get paid back by the amount of premium assistance you qualify for.
For more information please call ObamacareQuotes today at (800) 811-2640