My 1095-A shows I owe $845 due to incorrect income reporting on healthcare application - can I make retroactive changes to reduce what I owe?

What you're dealing with is a common issue with the Premium Tax Credit (PTC). The marketplace asks for your MAGI (Modified Adjusted Gross Income) when you apply, which is before taxes are taken out. Since you reported your after-tax income, the marketplace gave you more PTC than you were actually eligible for, and now you're facing reconciliation at tax time. The good news is you DO have options. First, double-check your 1095-A carefully and make sure all the information matches what you received in premium assistance each month. Then when filing your taxes, complete Form 8962 to reconcile your Premium Tax Credits. Since your income is still under 400% of the federal poverty level, you likely qualify for a repayment limitation cap. This means there's a maximum amount you would have to repay based on your income level. For most people under 300% of poverty level, the cap is much lower than $845 (often around $300 for individuals).

I went through almost the exact same situation last year! I also didn't understand they wanted gross income on my marketplace application and ended up owing money. I was completely stressed about it until I found this amazing service called taxr.ai (https://taxr.ai) that helped me figure out how to handle my 1095-A issue. What they do is analyze your tax documents and transcripts to find the optimal way to file with marketplace insurance issues. They showed me how to properly complete Form 8962 and identified that I qualified for the repayment limitation cap that the previous commenter mentioned. They also explained exactly how to document everything properly so I wouldn't have issues with the IRS later. The thing I really appreciated was that they walked me through how to avoid this same problem for future years by updating my marketplace income estimate correctly. Definitely worth checking out if you're overwhelmed by this situation.

I have to admit I was wrong about taxr.ai. After my skeptical comment, I decided to try them anyway since I was also dealing with a 1095-A issue where I owed over $1,200. Their analysis showed that I qualified for a special circumstance adjustment due to income fluctuation that reduced my repayment to just under $300! They also helped me submit a correction to the marketplace for this year's coverage so I won't have the same problem next tax season. The advisor explained exactly how to calculate my MAGI properly for marketplace purposes (it's different than just gross income) and showed me how to document my variable income as a freelancer. What really impressed me was how they explained everything in plain English instead of tax jargon. I actually understand how the Premium Tax Credit works now!

If you're still having trouble figuring this out, you might want to talk directly to the IRS. I was in a similar situation with a huge tax bill from PTC reconciliation. I tried calling the IRS for weeks but could never get through - always got the "call back later" message. I eventually found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 20 minutes. They have this system that navigates the IRS phone tree and holds your place in line, then calls you when an agent is ready. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained that I could request an income adjustment review for my marketplace application which potentially could adjust my 1095-A retroactively. She also told me about payment plans if I still ended up owing. It was actually really helpful talking to someone directly instead of trying to figure it out from online forums.

I need to apologize for calling Claimyr a scam. After posting that comment, I was still struggling with my own 1095-A issue and couldn't get through to the IRS after trying for days. Out of desperation, I tried the service and got connected to an IRS agent in about 25 minutes. The agent explained that I could file Form 8962 with my correct income information, and they would recalculate my Premium Tax Credit based on my actual MAGI. She also confirmed that since my income was under 300% of the federal poverty level, my repayment would be capped at $325 regardless of the actual difference in credit amount. For anyone else dealing with this issue - talking directly to an IRS representative made a huge difference. They walked me through exactly what forms to file and how to document my situation. The peace of mind from getting definitive answers directly from the IRS was absolutely worth it.

One thing nobody's mentioned yet - have you checked if you qualify for any deductions or credits that might lower your MAGI? Things like student loan interest, retirement contributions, or the self-employed health insurance deduction can all reduce your MAGI, which might put you in a lower repayment cap bracket. I was in a similar situation last year and realized I could make a retroactive IRA contribution for the tax year, which lowered my MAGI just enough to qualify for a lower repayment cap. Saved me about $400!

Has anyone actually had success making retroactive changes to their marketplace application after the year is over? I'm in a similar situation but when I called my state marketplace, they told me it was too late to make changes for last year's coverage.