In 2014 I took money out of my Prudential IRA. Had some medical bills and had given my 2002 Ford Focus to my son. I needed a car and decided to take enough out to pay the med. bills and the car. Hated doing this but did not think it through. I was 64 at the time. My wife and I went on the Affordable Health Care Insurance Plan in 2014.We both lost good paying jobs years earlier plus benefits. We payed about $450.00 a month for the both of us. We got a decent tax credit because we only made around $30.000+ between the two of us. I needed $25,000 to pay some medicals bills and buy a car. Was without insurance after suffering a heart attack in 2011 because of pre existing condition. When we filed in 2015 we did not think that we would end up owing the IRS $10,000 dollars. The tax person stated that sum put us in a higher tax bracket. Plus when my wife signed up again for insurance for 2015 she only stated what we made and not the IRA money.So now we pay $200.00 a month for a loan to pay the IRS.I guess its taxable income whether you have this extra money for a short time? I went on Medicare this year but wife has the Affordable Care Insurance. She did not receive a better tax credit because of the extra money we took. She did not include the IRA money when she applied. Not on purpose, just did not think we had to. I hope this makes sense.How can they sock it to us when they know we don’t make $70,000 a year? Anything we can do besides never doing this again?

Terry Says:  I want to post this entire letter because you are not alone — and it will serve as a warning to others!   There is nothing you can do about this situation.  ANY INCOME is considered for purposes of the federal tax credits for the Affordable Health Care plans (Obamacare).   IRA withdrawals are not exempted.

Given that you have higher income, based on these withdrawals, you should ACT NOW before the January 15th deadline to change plans.  You’ve been hunting for subsidized plans for your wife, but won’t qualify this year.  Instead you might want to look  for a high deductible plan which could be less expensive.  Go to www.eHealthinsurance.com.  In addition to searching ACA plans, they also have other plans that might be more suitable until your wife qualifies for Medicare.