1095-A: Why am I owing $4 to IRS when I actually made less income than reported?

The premium tax credit system can definitely be confusing! What's happening is that when you reconcile your 1095-A information on your tax return, the calculation looks at your actual income versus the advance premium tax credit you received throughout the year. Even though you made less money, there are other factors in the premium tax credit formula that could affect the final amount. For example, the benchmark plan (second-lowest cost Silver plan) in your area might have changed, or there could be differences in how your household size and income interact with the federal poverty line thresholds. Sometimes the calculation is affected by rounding in the monthly premium amounts or other small mathematical factors that result in minor adjustments when everything is finalized on Form 8962 (Premium Tax Credit form).

I went through almost exactly the same situation last year with my 1095-A and premium tax credits. So frustrating! I tried figuring it out myself for hours before I discovered taxr.ai (https://taxr.ai) which honestly saved me so much headache. Their system analyzed my 1095-A form and explained that in my case, even though my income was lower, I fell into a different calculation bracket that slightly reduced my eligible credit. They explained how the premium tax credit uses these specific thresholds rather than a smooth sliding scale, which was why my slightly lower income actually resulted in owing a small amount instead of getting more back. The explanation made it so much clearer than anything else I found online.

Just wanted to follow up about my experience with taxr.ai after our conversation about the 1095-A issue. I was really skeptical that it would find anything my tax preparer missed, but I decided to try it anyway since my situation with owing money despite lower income was driving me crazy. Turns out there actually WAS a calculation error on my Form 8962! The system identified that my tax preparer had entered one of the monthly premium amounts incorrectly from my 1095-A, which was throwing off the entire calculation. Once I fixed that single number, my $78 bill turned into a $142 refund. Absolutely worth checking out if you're dealing with marketplace insurance and premium tax credits!

If you're dealing with any kind of tax issues like this and need to actually talk to someone at the IRS about your 1095-A or premium tax credit calculation, I highly recommend Claimyr (https://claimyr.com). I spent THREE DAYS trying to get through to the IRS about a similar issue last year, and kept getting disconnected. Claimyr got me through to an actual IRS agent in under 45 minutes! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The IRS agent was able to look at my account and confirm there was a discrepancy with how my premium tax credit was calculated, and walked me through exactly what I needed to do to fix it.

I need to apologize for my skepticism and give credit where it's due. After posting my doubtful comment, I decided to try Claimyr because I was desperate to resolve my own premium tax credit issue with a 1095-A discrepancy. I was connected to an IRS representative in about 35 minutes (on a Tuesday afternoon). The agent confirmed that there was actually an error in how the Marketplace had reported one of my monthly premium amounts on my 1095-A. She told me exactly how to request a corrected 1095-A from the Marketplace, which I did. When I received the corrected form and resubmitted my taxes, my unexpected tax bill completely disappeared. Would NEVER have resolved this without actually speaking to someone at the IRS, which wouldn't have happened without this service.

I've dealt with this 1095-A reconciliation issue for three years running now. Here's something nobody tells you: if your income is near certain percentage thresholds of the Federal Poverty Level (like 200% or 300% FPL), even small changes in income can push you over a cliff where the subsidy calculation changes dramatically. It sounds weird that owing $4 with a lower income could happen, but if you were right at one of these thresholds, it makes perfect sense. The system isn't perfectly linear - it has these "cliffs" where the formula changes.

Did you check for any data entry errors? I was in the exact same boat - owed $12 despite making less than estimated - and it turned out I had accidentally transposed two numbers when entering info from one of the columns on my 1095-A. Double-check all the numbers you transferred from your 1095-A to Form 8962!