Is this normal? Healthcare 1095-A reduced my tax refund by $1350 - seems really high!

What you're experiencing is unfortunately normal with the Premium Tax Credit reconciliation. When you signed up for marketplace coverage, they gave you an advance premium tax credit (APTC) based on your estimated income for the year. At tax time, this gets reconciled with your actual income. What likely happened is that your actual income for the year (including unemployment) was higher than what you estimated when you applied for marketplace coverage. Since your income was higher than estimated, you weren't eligible for as much premium tax credit as you received in advance, so now you have to pay back the difference. The fact that you switched to employer coverage in September was automatically factored in since your 1095-A only shows marketplace coverage through August. That's why columns A, B, and C on your 1095-A should only show values for January through August. The $1,350 repayment amount does seem to align with about 8 months of receiving roughly $175 per month in advance credits that you ended up not qualifying for based on your final income. This is one of the more frustrating aspects of the ACA marketplace system.

I went through almost the EXACT same situation last year! I had marketplace coverage then got a job with benefits, and my tax refund got absolutely decimated. I was so confused and upset. Then I found https://taxr.ai which helped me understand exactly what was happening with my Premium Tax Credit reconciliation. When I uploaded my 1095-A to their system, they explained everything in plain English and showed me how the repayment was calculated. They even found that I had incorrectly entered some of my monthly premium amounts which saved me about $200. Apparently a lot of people make mistakes with these forms because they're so confusing! The tool also showed me how my unemployment income affected my marketplace subsidies - something I had no idea about. Definitely worth checking out if you're dealing with marketplace insurance forms. They analyze everything automatically.

Just wanted to follow up - I used taxr.ai and it was super helpful! I uploaded my 1095-A and tax documents and it showed me that I had actually made a mistake when entering my SLCSP amount. My tax software had pulled the wrong numbers from one of the months. The tool also showed me that I qualified for a higher deduction because of some medical expenses I paid that were related to my marketplace plan's high deductible. I was able to go back and correct everything in my tax software, and got back about $340 of what I thought I had lost. It also gave me some really clear advice about estimating my income more accurately for next year if I end up on marketplace coverage again. Really glad I gave it a try after feeling completely confused by this whole 1095-A situation!

I literally spent 3 WEEKS trying to get through to someone at the IRS to explain this exact issue to me. Would call, wait on hold for hours, then get disconnected. So frustrating! Finally I tried https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they basically call the IRS for you and then call you when an agent is on the line. Got connected to an actual IRS rep in about 2 hours (instead of the 15+ hours I wasted trying myself). The agent explained that the Premium Tax Credit reconciliation is required by law and confirmed my repayment amount was calculated correctly. They also told me I could set up a payment plan if needed since the amount was large. The most helpful part was learning about Form 8962 worksheet and how the calculations work. If you're struggling to understand your specific situation or just can't get through to the IRS, definitely try this service. Saved me so much time and frustration.

I need to apologize for my skeptical comment. I actually tried Claimyr after continued frustration with the IRS phone system. Got connected to an agent in about 90 minutes after trying for DAYS on my own. The IRS rep explained that in my case, I had made an error in how I reported my change in coverage. Turns out I needed to indicate the exact date I got employer coverage, not just the month. They helped me file an amended return and I'm getting $780 back that I thought was gone forever. The agent also explained how to better estimate my income for next year's marketplace application to avoid owing money again. This was way more helpful than I expected. Sometimes you need to talk to an actual human who can look at your specific situation. Definitely worth it and I take back my "scam" comment.

Healthcare marketplace and taxes is a total nightmare combo. Here's what I learned after going through this exact situation: 1. When you get marketplace coverage, they ask for your ESTIMATED yearly income. If you underestimate, you get too much subsidy and have to pay it back. 2. If you get a job mid-year with insurance, you need to CANCEL your marketplace plan immediately. Don't just stop paying - formally cancel it. 3. Unemployment counts as income for calculating your subsidy eligibility, which screws a lot of people. 4. There are repayment caps based on income, but they only help if you're under 400% of federal poverty level. 5. Next time, try to overestimate your income slightly when applying for marketplace coverage. You might pay slightly more monthly but avoid a tax-time surprise. This system is brutal but at least your experience is "normal" - doesn't make it suck any less though!

Is there any legitimate way to reduce this tax hit? I'm in almost the identical situation - had marketplace for 7 months, then employer coverage, and now owe $1200 back. My tax guy just says "that's how it works" but there must be something we can do?

Random question: did anyone here get their 1095-A corrected? Mine had wrong values but I'm getting nowhere with the marketplace phone line. Been trying for weeks and I'm about to just file with the wrong form and deal with the mess later.

I feel your pain - this exact situation happened to me two years ago and it was such a shock! The $1,350 repayment does sound about right given your income and the advance credits you received. One thing that might help explain it: when you were unemployed and applied for marketplace coverage, you likely estimated a lower income for the year. But your final AGI of $47,435 (including that unemployment income) put you in a higher income bracket than expected, which reduced how much premium tax credit you were actually eligible for. The silver lining is that you did have health coverage when you needed it most - during unemployment. And switching to employer coverage in September was absolutely the right move. For next year, if you ever need marketplace coverage again, try to be conservative with your income estimates. It's better to get a smaller subsidy upfront and get money back at tax time than to owe a large repayment. Also, make sure to report income changes to the marketplace as soon as they happen. The system is frustrating but you didn't do anything wrong - this is just how the ACA reconciliation process works unfortunately.