Healthcare.gov subsidy
I am retired and had regular ira pretax distributions per month is 2018 to have enough income to qualify for healthcare.gov vs Medicaid. In 2019, I began social security in addition to the existing distributions. After starting my 2019 tax return, I discovered I was about $1000 over the max income for subsidies after adding dividends. And thus have to payback about $7000 subsidies! Is there anyway I can payback some income to not lose my subsidies?
I saw something In the tax software about reinvesting a distribution to take it out of my income but sounded like you had to do that within 60 days of the distribution, my last was early December 2019.
Any advice? I’ve already changed distributions from pretax to after tax for 2020 so it doesnt happen again.
Thank you
Terry Says
OK, a couple of things don’t seem right here, and I don’t know where you’re getting your information.
First, are you on SS and at least 65 years old? If so, you should have signed up for Medicare at the same time. Then you wouldn’t need an ACA policy! If you took SS early, then you have to wait until age 65 to sign up for Medicare.
Second, who told you that you would have to pay back $7,000 in subsidies?? That doesn’t sound right. Seriously, who told you that?
Third, there is NO WAY to take an IRA distribution on an “after tax” basis? So where did you get that idea? All IRA distributions are taxable as ordinary income.
If you’ll write back with some answers to these questions, maybe I can get you some direct help from the folks at TurboTax on your 2019 return. Don’t file it yet, if you haven’t already.
Someone is giving you bad advice — or maybe you are misunderstanding that person. But either way, it’s dangerous!
