Thanks for this video. We're struggling with this challenge right now. I suspect that CC might want confirmation of our income since it will be HUGELY lower in 2025 than in past years. How do they ask you to document a *lack* of income? There's simply no paycheck now since we're living off of savings and investments. How long does such income confirmation usually take? What do we do for healthcare in the meantime if our cobra benefits have stopped before they get back to us?
I usually file an income attestation for my clients. Simple and easy, no documentation is required. As long as you get the income verification in before the deadline, no hiccups in subsidies.
I've been unemployed for most of 2024. My industry is in terrible shape and many of my colleagues are in a similar situation. How can I estimate income when I have no idea what my work will be like in 2025? What if my estimate is too optimistic and I end up making way less? Is there a mechanism for refunding overpayment if income turns out to be lower than the estimate? I'm really worried about money right now, so it's hard to face paying the amount that coincides with my usual income, because I don't know when new jobs will appear. I don't have any recent experience in other fields, so I couldn't guess how much I could make if I look outside my usual industry.
The subsidies or Premium Tax Credits are reconciled on your federal tax return. If you make less than your estimate, but the income is over 100% of the federal poverty level, you will get a refundable tax credit on your taxes. Another option is to reduce the income. Of course, you might be Medi-Cal eligible. Medi-Cal is $0 premium, $0 cost health care services and prescription medications. Yes, it is Medi-Cal and getting care can, at times, be a challenge. However, if money is tight, and you don't use health care services, and want protection for some freak emergency care, Medi-Cal can save money and relieve the anxiety of having to pay another bill every month.
If your guessitimate is pretty close to your final Modified Adjusted Gross Income (MAGI), form 8962, then something else is going on. Or, there is income being added to the MAGI that you are unaware of or did not originally count. A common mistake is not adding Social Security retirement benefits into the MAGI. Usually SS is not taxable, but it is counted for the MAGI.
There are times when SWAG is all you got. When that is the option, it is best to hedge the income high to limit the liability of repaying any excess Premium Tax Credit incurred with a very low income estimate.
Yes, as long as the income is over 100% of the federal poverty level, you will receive a tax credit for the amount of Premium Tax Credit you should have received during the year with a lower income.
@@KevinKnauss Thank you. My income is mostly due to the stock market. I can have big swings every year. I'm guessing I take a 3-year average to start the year and adjust my income guesstimate in june. Thoughts on a better way?
@@coulterjb22 A 3 year average sounds good. I would probably hedge high so if the year is better than expected, you would not have to repay as much back at tax time.
If you are Medi-Cal, nothing will happen. If you have a Covered California health plan with the subsidies, you may have to repay some of the excess subsidy back to the IRS.
If the conversion creates a tax event that adds into your Adjusted Gross Income, then should be captured on the Covered California income section. If the tax event is not included in the CC estimate, you have underestimated your income. The end affect is that you may have to repay excess APTC subsidy when you do your federal income tax return because your final income dollar amount is higher than the estimate in CC upon which the subsidy was calculated.
This is north of Dotons Point. The lake does seem a little low for November. Even with the good rain we had after this recording, there is still a lot of lake bed to explore.
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Thanks for this video. We're struggling with this challenge right now. I suspect that CC might want confirmation of our income since it will be HUGELY lower in 2025 than in past years. How do they ask you to document a *lack* of income? There's simply no paycheck now since we're living off of savings and investments.
How long does such income confirmation usually take? What do we do for healthcare in the meantime if our cobra benefits have stopped before they get back to us?
I usually file an income attestation for my clients. Simple and easy, no documentation is required. As long as you get the income verification in before the deadline, no hiccups in subsidies.
@@KevinKnauss Thank you!
I've been unemployed for most of 2024. My industry is in terrible shape and many of my colleagues are in a similar situation. How can I estimate income when I have no idea what my work will be like in 2025? What if my estimate is too optimistic and I end up making way less? Is there a mechanism for refunding overpayment if income turns out to be lower than the estimate? I'm really worried about money right now, so it's hard to face paying the amount that coincides with my usual income, because I don't know when new jobs will appear. I don't have any recent experience in other fields, so I couldn't guess how much I could make if I look outside my usual industry.
The subsidies or Premium Tax Credits are reconciled on your federal tax return. If you make less than your estimate, but the income is over 100% of the federal poverty level, you will get a refundable tax credit on your taxes. Another option is to reduce the income. Of course, you might be Medi-Cal eligible. Medi-Cal is $0 premium, $0 cost health care services and prescription medications. Yes, it is Medi-Cal and getting care can, at times, be a challenge. However, if money is tight, and you don't use health care services, and want protection for some freak emergency care, Medi-Cal can save money and relieve the anxiety of having to pay another bill every month.
Thanks so much for this video, and clarity on a murky situation. Lots of room for interpretation on what they ask for in terms of income.
It is fairly clear cut because it is all based on IRS rules. When in doubt, check IRS regulations.
This is so true. I've had covered California since 2018 and every year my "guessstimate"" is off I have always had to pay back.
If your guessitimate is pretty close to your final Modified Adjusted Gross Income (MAGI), form 8962, then something else is going on. Or, there is income being added to the MAGI that you are unaware of or did not originally count. A common mistake is not adding Social Security retirement benefits into the MAGI. Usually SS is not taxable, but it is counted for the MAGI.
So far the best video on this subject. Looks like a SWAG "Scientific Wild As Guess".
There are times when SWAG is all you got. When that is the option, it is best to hedge the income high to limit the liability of repaying any excess Premium Tax Credit incurred with a very low income estimate.
If your estimated income was much higher, will you get a credit or cash back?
Yes, as long as the income is over 100% of the federal poverty level, you will receive a tax credit for the amount of Premium Tax Credit you should have received during the year with a lower income.
@@KevinKnauss Thank you. My income is mostly due to the stock market. I can have big swings every year. I'm guessing I take a 3-year average to start the year and adjust my income guesstimate in june. Thoughts on a better way?
@@coulterjb22 A 3 year average sounds good. I would probably hedge high so if the year is better than expected, you would not have to repay as much back at tax time.
i unexpectedly made 900$ over the limit last year does anybody know what i should do? or even what happens next? Sit and pray?
If you are Medi-Cal, nothing will happen. If you have a Covered California health plan with the subsidies, you may have to repay some of the excess subsidy back to the IRS.
@@KevinKnauss thanks
Does Traditional IRA distribution that’s rolled into Roth IRA count toward countable income for covered California?
If the conversion creates a tax event that adds into your Adjusted Gross Income, then should be captured on the Covered California income section. If the tax event is not included in the CC estimate, you have underestimated your income. The end affect is that you may have to repay excess APTC subsidy when you do your federal income tax return because your final income dollar amount is higher than the estimate in CC upon which the subsidy was calculated.
Wow the lake looks low
This is north of Dotons Point. The lake does seem a little low for November. Even with the good rain we had after this recording, there is still a lot of lake bed to explore.
@Ben Ryan Black It can be a nightmare. Covered California is full of hidden rules and conditions.
@Ben Ryan Black Call anytime and we will review your situation and figure out the least cost health plan coverage for your family.
It's a RACKET!! I was assessed, and still am, being assessed. I don't know what to do.
@@penelopeplimsoul3617 How do you mean assessed?