IRS 2014-7 and ACA credit

agdx

I'm a live-in IHSS provider who received W2 with 0 in box 1 and all wages are in Box 12 code II.

My understanding is that when calculating ACA AGI, the waver income will actually reduce it even if it's not in my gross income and will not effect Federal and State AGI

Is this correct and will FreeTaxUSA will handle it this way?

Thanks for the help

*** I just verified the above (based on ChatGPT), is absolutely wrong***

It will make the waver payment excluded twice for ACA

JohnV

If the income you received is a qualified Medicaid waiver payment, then the income may be excluded from your income under Notice 2014-7. I so, then you would have no income and no AGI for purposes of the ACA Marketplace. When you fill out the ACA application, did you enter 0 as your income for the year, or what income did you provide to the Marketplace on your application?

When you fill out a Marketplace application, you’ll need to estimate what your household income for the year. The Marketplace uses a number called "modified adjusted gross income (MAGI)" to determine if you qualify for savings. Please see what the Marketplace considered to be income here.

Depending on the income you estimated you would have for the year, and if the tax return income is different from what you have estimated, then you may owe back any subsidy you received. The tax return will reconcile your actual income versus your estimated income on the Marketplace application, and then calculate how much advance premium tax credit you should have received versus how much advance premium tax credit you actually received.