Married December 2014, ACA penalty.

[johnson1179]

What is the name of your state (only U.S. law)? WI

My now wife bought insurance in the marketplace starting April 2014. She earned very close to the estimated amount used for subsidy calculations. We got married at the very end of 2014, and HR BLOCK software is suggesting she needs to repay the entire subsidy (over $2,000), because my income puts her way over the estimate. It seems as their is an alternate calculation on IRS website, but it makes little to no sense. Any help is welcomed.

 

[davew128]

If you have questions about the software you should contact the vendor. Beyond that, I'm not seeing the problem. The subsidy was ALWAYS conditioned upon income reported on the tax return, which, since you got married, includes yours.

 

[LdiJ]

What is the name of your state (only U.S. law)? WI

My now wife bought insurance in the marketplace starting April 2014. She earned very close to the estimated amount used for subsidy calculations. We got married at the very end of 2014, and HR BLOCK software is suggesting she needs to repay the entire subsidy (over $2,000), because my income puts her way over the estimate. It seems as their is an alternate calculation on IRS website, but it makes little to no sense. Any help is welcomed.

There is an alternative calculation, that is quite complicated, but it should reduce the subsidy repayment. Personally, I would recommend using a tax professional this year rather than attempting to do it yourself. From what I can see, the professional versions of software seem to be better equipped to handle that. However in the end, much is going to depend on just how high your combined income ends up being. The higher the income, the less reduction the alternative calculation gives.

 

[johnson1179]

If you have questions about the software you should contact the vendor. Beyond that, I'm not seeing the problem. The subsidy was ALWAYS conditioned upon income reported on the tax return, which, since you got married, includes yours.

AGreed, but we were marrieD 2 days in 2014. Had the marriage occured in say, AUgust, the Subsidy would have decreased going forward. I dont think it makes much sense she has to pay back, WHEN 99.9% of the year her income was <16,000/ year that her subsidy was based on

 

[Zigner]

AGreed, but we were marrieD 2 days in 2014. Had the marriage occured in say, AUgust, the Subsidy would have decreased going forward. I dont think it makes much sense she has to pay back, WHEN 99.9% of the year her income was <16,000/ year that her subsidy was based on

From what I understand, it is calculated monthly.

 

[LdiJ]

From what I understand, it is calculated monthly.

The Shared Responsibility Payment is handled monthly, the Premium Tax Credit reconciliation is a bit different. However, the alternate calculation does take into consideration the length of the marriage.