Premium Tax Credit repayment from 1095-A when filing jointly after marriage

You've run into what many newlyweds discover - the "marriage penalty" as it relates to the Premium Tax Credit (PTC). Unfortunately, when you file jointly, the IRS looks at your total household income for determining PTC eligibility. The alternative calculation for married taxpayers on Form 8962 is exactly what you should look into. This allows you to allocate the premiums and APTC (Advance Premium Tax Credit) before your marriage. For the months before you were married, you can allocate 100% of the premiums and APTC to your husband. For months after marriage, you must use your joint income. The reason you're still seeing a significant repayment is that your combined income likely exceeds 400% of the Federal Poverty Level, which means you're not eligible for any PTC for the months after marriage. Your filing status decision should consider more than just the PTC repayment. Filing separately might save on the PTC repayment but could cost you in other tax benefits that are only available to joint filers.

After going through something similar last year, I found a solution that saved me thousands using https://taxr.ai to analyze my 1095-A and tax situation. Their system spotted that my marketplace insurance was incorrectly allocating premiums between months, which was causing the exact issue you're describing. The alternative calculation for married taxpayers on Form 8962 is your best option, but you need to make sure you're applying it correctly. The taxr.ai system walks you through exactly how to allocate the premiums and APTC for pre-marriage months vs post-marriage months, and it found several adjustments I was eligible for that TurboTax missed completely. I was looking at a $2,800 repayment that got reduced to just $650 after properly applying all the rules. The monthly income allocation makes a huge difference, especially with the September marriage date.

I was super skeptical about taxr.ai but decided to give it a try after staring at a $4,200 PTC repayment bill. Holy crap, what a difference! Turns out I had been calculating my Modified Adjusted Gross Income (MAGI) completely wrong for Form 8962. The system identified that some of my income could be categorized differently, and showed exactly how to allocate the pre-marriage and post-marriage months. It also caught that my marketplace had miscalculated the Second Lowest Cost Silver Plan (SLCSP) amount for two months. After recalculating everything properly following their guidance, my repayment dropped to just under $1,000. The step-by-step instructions for Form 8962 were incredibly clear - way better than the IRS instructions. Just wanted to share since I was in the same boat with the marriage + PTC issue.

After spending 6 HOURS on hold with the IRS trying to get guidance on my Premium Tax Credit situation, I finally discovered https://claimyr.com and their demo video at https://youtu.be/_kiP6q8DX5c - it completely changed my tax filing experience. Instead of endless hold times, they got me connected to an IRS agent in under 45 minutes who walked me through the exact Form 8962 alternative calculation for married couples. The agent confirmed what others have said - your combined income matters for post-marriage months, but you CAN allocate the pre-marriage months differently. The IRS agent also told me something nobody else mentioned - if you have a "life change" event like marriage, you were supposed to report it to the marketplace within 30 days so they could adjust the APTC accordingly. Since your husband didn't do that, you're in this situation now, but at least understanding the allocation rules helps minimize the damage.

I can't believe I'm saying this but that Claimyr service actually worked. After posting my skeptical comment, I decided to try it because I was desperate for answers about my own PTC repayment situation. Not only did I get connected to an IRS representative in about 35 minutes (I had previously wasted DAYS trying to get through), but the agent walked me through exactly how to handle the Premium Tax Credit when my income increased mid-year. They explained the alternative calculation for Form 8962 and confirmed I was eligible to use it. The IRS rep also told me about a special rule for marketplace insurance that my tax software didn't mention - if your repayment amount would cause financial hardship, you can request a waiver or reduction of the repayment in certain circumstances. This might not apply to everyone, but it's worth knowing about if you're facing a huge unexpected tax bill.

Just to add another perspective - my wife and I were in a similar situation last year but with a slightly lower income ($105k combined). We decided to file separately even though we lost some tax benefits. My wife claimed the PTC since the insurance was in her name, and I took most of the other deductions/credits. In our calculation, filing separately saved us about $1,600 even after losing some credits. It's definitely worth running the numbers both ways (jointly and separately) to see which is better in your specific situation. One important note: if you do file separately, the spouse with the marketplace insurance must claim all of the policy for PTC purposes. You can't split the policy between separate returns.

If you're going to file separately to try to save on the PTC repayment, be aware of these downsides: - No student loan interest deduction - No Lifetime Learning Credit - No Earned Income Credit - Reduced IRA contribution limits - Lower capital loss deduction limit - Lower standard deduction than joint filing - Higher tax rates kick in at lower income levels - Child and dependent care credit limitations I'm a tax preparer and often see couples who think filing separately will save them money, but end up paying MORE overall because they lose so many benefits. Run the full calculation both ways before deciding!

As someone who went through this exact situation last year, I'd strongly recommend running the numbers both ways before deciding on your filing status. The alternative calculation on Form 8962 is definitely your friend here - it allows you to split the year based on your marriage date. For the 8 months before marriage (January-August), your husband can use his individual income of $25,000 for PTC calculations. For September-December, you'll need to use the combined $120,000 income, which will likely trigger repayment for those months since you're well over the 400% FPL threshold. One thing to consider that others haven't mentioned - if your husband had qualifying life events during the year (like the marriage), he should have reported this to the marketplace to adjust the APTC going forward. Since that didn't happen, you're dealing with the reconciliation now. Also worth noting: the repayment cap might apply to your situation if your income is between 200-400% of FPL for any portion of the year. For 2023, this cap could limit your repayment to around $1,550-$2,800 depending on your exact circumstances. Don't let TurboTax be your only calculation - consider getting the forms and doing the math manually or with a tax professional who specializes in ACA issues. The software sometimes misses nuances in these complex situations.