Health Insurance Subsidy Penalty

Forum|Forum|3 years ago
February 11, 2023
1 reply
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I had a not-so-great job at the start of 2022, and I had to provide my own health insurance through the health insurance marketplace. I landed a great job a few months in, and then switched to my new employer's health plan as soon as I was eligible. So, I had marketplace insurance for 6 months and employer insurance for 6 months. Now, I'm being forced to pay back all of the subsidies for the first 6 months. I feel like I'm being penalized for bettering my job situation.

MonikaK1

The amount you would be asked to pay back is the Advanced Premium Tax Credit. At the time you sign up for marketplace insurance, you have the option to receive the Premium Tax Credit in advance - it isn't mandatory. The amount you received is based on what you estimated would be your income for the year.

If at the end of the year, you’ve taken more premium tax credit in advance than you’re due based on your final income, you’ll have to pay back the excess when you file your federal tax return. By the same token, if you’ve taken less than you qualify for, you’ll get the difference back.

Please see this article for more information about the Premium Tax Credit from TurboTax.

Please see here for more information on this topic from healthcare.gov.

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