I have a client that was part of the Marketplace Insurance fund in New York. She married in September at which time she cancelled the coverage. In doing the reconciliation of the 1095A it is taking the total Income from the return for her husband also. He had coverage so it should not be included. I have not been able to get his income out for the reconciliation and the program is saying that she needs to pay it all back which is not accurate.
Does anyone know how to get the total income out and only use her income for the reconciliation. If I did her separate it is onlu 383 married they want 3383
The software is correct. It is total household income; you don't get to exclude his.
You said "did her separate"... meaning exactly what? MFS? That is an option, as is contributing to a retirement plan (IRA, SEP, ...) and/or an HSA.
TGB will drop by with any other tips, but just excluding his income isn't an option.
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As others said, it is based on the total Household income that is on the tax return (and in some cases, the dependents). It does not matter if the spouse (or dependents) are covered by non-Marketplace insurance, their income still counts.
Be sure you indicate to use the "Alternative Method in the Year of Marriage". That option uses 1/2 of the combined total income on the tax return to calculate the repayment of the credit. In SOME cases that will reduce the repayment. Unfortunately, it often doesn't reduce the repayment.
f I did her separate it is onlu 383 married they want 3383
Is that the repayment of the Premium Tax Credit, or is the the final total on the entire tax return? If that the amount of the repayment of the Premium Tax Credit, that is wrong, as her repayment would be over $383. Filing separately completely disqualifies the Premium Tax Credit, so she would need to repay the entire amount of the Advance credit, up to the income limits (which are all more than $383). So if you file her separately, be sure to check Form 8962 to see that she is NOT receiving any credit (column e on Lines 12-23).
On the other hand, filing separately will get HER income low enough to trigger the repayment limit, so the repayment would be less than if they filed a Joint return. Whether or not the reduced repayment will result in a better overall outcome, that varies on the specific details of the tax returns.
If you can get their income below 400% of the Federal Poverty Level (or 200% or 300%) by making Traditional IRA contributions, that will trigger the repayment limit, so they may not need to repay as much.