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What if I show a negative AGI Line 37 – 7 or MAGI Income.
Can I get subsidies?
Buy a regular Plan?
What if I have income from a job, rentals, business or other?
A tax loss occurs when total expenses are greater than total revenues under the tax reporting rules of the applicable government jurisdiction. A tax loss reduces an entity’s tax liability only in proportion to its tax bracket.
Businesses and individuals will frequently reduce their reportable revenues or increase their reportable expenses for tax purposes in order to reduce their tax payments. Thus, an entity may report a tax loss at the same time that it reports a profit under generally accepted accounting principles or international financial reporting standards. Accounting Tools.com
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You might also look at the income chart. If your family income MAGI Modified Adjusted Gross Income, Line 37 + Social Security, Foreign Income, Exempt Interest is below 138% of Federal Poverty Level you qualify for Medi-Cal – Medicaid and would not get Covered CA subsidies.
We do not get paid to help you with Medi-Cal nor any real support from Medi-Cal in training or anything. Our Medi-Cal website is Pro Bono. If you have questions on Medi-Cal, please look through that site. We’ve linked to whatever authoritative information we can find. If you have questions on Medi-Cal, please ask at the bottom of the page that is most appropriate. You don’t have to leave your name. We are not here to sell you on the benefits – coverage of Medi-Cal. We don’t get paid for it. Here is our FAQ page on Medi-Cal.
If you qualify for Medi-Cal, no one can force you to use it. You can still buy a regular policy from any Insurance Company. You just won’t get subsidies.
Our page on the Premium Tax Credit IRS #8962 & Instructions
View our page on how the APTC Advance Premium Tax Credit is Calculated CFR §1.36 B – 3
Insure Me Kevin.com where guy had to pay back subsidies as Covered CA didn’t add that back in for line 37 MAGI.
Insure Me Kevin.com inflating income to avoid Medi-Cal
Fudging the income? Fraud & False Statements
This is one of those unintended consequences of the PPACA. The law says APTCs are obtainable by persons with MAGI of 100%-400% FPL. This is a unique situation and I don’t believe Congress expected this as the norm. But the law is the law, and the IRS will either allow or disallow the APTCs.
Personally, I think the IRS will allow the APTCs since this person is obviously a “taxpayer” not a welfare recipient. Otherwise, it would make a great case in Tax Court.
Steve: How many will even get the chance? Has Covered CA been overlooking it? Even when a qualifying MAGI is put in, but line 37 is negative?
Like this reply from Covered CA — Response By Email (R) (02/10/2016 12:22 PM)
Good day Steve Shorr, Once you update their income, and it’s reflecting the negative income then they will be up for review. Please let me know if you need further assistance.
Does Covered CA actually review the Tax Return? I did mention wrong information and Covered CA agreed about it not being worth the legal ramification. Fudging the income? Fraud & False Statements
I think this probably affects a significant number of taxpayers nationwide, and is “ripe” for adjudication in the federal Tax Court in order to have a definitive ruling. Theoretically, MAGI Medi-Cal eligibility is a month-to-month test, not really an annual test.
Unfortunately, I don’t know any tax attorneys, but if your client is willing to take his case to Tax Court, I can probably get a referral or two from some of the insurance attorneys I have worked with.
Flow Chart – Can you take the PTC Premium Tax Credit Publication #974
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Life Insurance Buyers Guide
IRS Interactive Tax Assistant
Turbo Tax Video How to Claim Tax Credit
What Is the Premium Tax Credit (PTC)?
Who Must File Form 8962
Who Can Take the PTC
Terms You May Need To Know
Minimum Essential Coverage (MEC)
Individuals Not Lawfully Present in the United States Enrolled in a Qualified Health Plan
Determining the Premium for the Applicable Second Lowest Cost Silver Plan (SLCSP)
Allocating Policy Amounts for Individuals With No One in Their Tax Family
Allocation of Policy Amounts Among Three or More Taxpayers
Alternative Calculation for Year of Marriage
Self-Employed Health Insurance Deduction and PTC ...
Tax Loss Carry Forward