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which_chick) wrote2022-11-16 08:29 am
which_chick) wrote2022-11-16 08:29 am
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I love getting mail from the IRS...
So I got this letter from the IRS the other day. It's my favorite to get mail from the IRS. The letter was regarding my failure to file a Form 8962 and Form 1095-A for the 2021 tax year.
These forms have to do with the Premium Tax Credit for health care coverage from the Health Insurance Marketplace (Pennie, in my state). Basically, if you shop for your healthcare on the Pennie website, they check to see if you're poor enough to qualify for government money to cover some of the cost of your governmentally-mandated health insurance. (For non-USian-readers: Health insurance in the United States is brutally expensive.) And, if you are poor enough to qualify for government money to cover this cost, the government pays a chunk of your monthly health insurance bill.
In my personal case, having filled out all the information 100% truthfully and having answered 100% of the questions asked on the Pennie website, the government in its infinite wisdom decided that they would pay for $7798 worth of health insurance for the 2021 tax year. (This is out of a total bill of $10358. So, a goodly chunk, there. I pay $28 A DAY to have health insurance.) I am a fifty-two year old woman of reasonably good health who takes no ongoing medications (except over-the-counter Ocuvite) and has no history of any medical problems like high blood pressure or heart disease or diabetes or anything like that.
Fwiw, that $28 A DAY did not cover the additional $596.44 I spent on the broken wrist project. I pay $28 A DAY and also have to actually pay more for stuff when I get it. My point here is that the $28 A DAY does not cover everything, the which I am pointing out in case you sweet summer child THOUGHT THAT IT DID. It does not. It also does not cover vision or dental.
Now, once you get an Advance Premium Tax Credit (that's the $7798 that the government pays on my health insurance bill, split up into monthly amounts), you have to file the Form 1095-A (comes filled-out from the Pennie website) with your taxes, along with a Form 8962, to prove that you actually were poor enough to have the government pay part of your healthcare costs. The Pennie website assesses your eligibility at the start of the year, using your prior year numbers, and then the IRS looks at these other forms at the END of the year to see if you maybe somehow earned extra money that could have unqualified you during the year so that they can then takesies backsies the assistance you turned out to not-actually-need under their model.
I didn't know about this because I didn't do the Pennie thing until Pandemic (when I had a lot of free time because work was in... a semi-shut-down mode). For the 2020 tax year, the government waived the "1095-A and Form 8962" filing stuff so nobody had to do it. But, for 2021, you were supposed to file these forms. I did not.
Oops. Hence the letter from the IRS.
People get all horrified by letters from the IRS but, while I do not enjoy them, it's not that big of a deal. You read the letter. You respond to the letter (in writing) and provide your alternative version of events or (in this case) send them the forms you neglected to file. How do you know what forms they want? They tell you.
"Send us the following documents:
---- A completed Form 8962
---- A copy of your Form 1095-A"
Okay, then. So, I sent the forms back. The letter explicitly said not to send them any money or a 1040x (the form for a revised tax return) or anything other than what they explicitly asked me to send.
Now, during 2021, an S-corp company that I own stock in received a payoff for a contract of sale on a building. This was somewhat unexpected but the upshot was that I received $30K more in income for the year than I had expected to receive. So, I wound up being not-so-eligible for government assistance on the insurance front. Nobody was doing anything bad, dude buying the building just secured a commercial mortgage through a bank at a lower interest rate and paid off the balance due on his contract of sale.
Anyway, this is why the takesies backsies provision is important.
The forms I sent back show an "overage" of assistance of $5688 that I will have to send to the government. I expect a letter from them dunning me for the money in fairly short order, at least on the IRS time scale for "short order".
INTERESTINGLY, the government PAID FOR $7798 worth of insurance for me (on a year in which I made 778% of the poverty line for a single individual in the continental 48) so even though I reported an income of ALMOST 100K AND even though I will have to pay back the $5688 of "overage", the government still gave me $2110 in healthcare assistance. I am not sure why they did that, but I am not going to argue with $2K of government money.
I think we pay too much for healthcare in this country.
These forms have to do with the Premium Tax Credit for health care coverage from the Health Insurance Marketplace (Pennie, in my state). Basically, if you shop for your healthcare on the Pennie website, they check to see if you're poor enough to qualify for government money to cover some of the cost of your governmentally-mandated health insurance. (For non-USian-readers: Health insurance in the United States is brutally expensive.) And, if you are poor enough to qualify for government money to cover this cost, the government pays a chunk of your monthly health insurance bill.
In my personal case, having filled out all the information 100% truthfully and having answered 100% of the questions asked on the Pennie website, the government in its infinite wisdom decided that they would pay for $7798 worth of health insurance for the 2021 tax year. (This is out of a total bill of $10358. So, a goodly chunk, there. I pay $28 A DAY to have health insurance.) I am a fifty-two year old woman of reasonably good health who takes no ongoing medications (except over-the-counter Ocuvite) and has no history of any medical problems like high blood pressure or heart disease or diabetes or anything like that.
Fwiw, that $28 A DAY did not cover the additional $596.44 I spent on the broken wrist project. I pay $28 A DAY and also have to actually pay more for stuff when I get it. My point here is that the $28 A DAY does not cover everything, the which I am pointing out in case you sweet summer child THOUGHT THAT IT DID. It does not. It also does not cover vision or dental.
Now, once you get an Advance Premium Tax Credit (that's the $7798 that the government pays on my health insurance bill, split up into monthly amounts), you have to file the Form 1095-A (comes filled-out from the Pennie website) with your taxes, along with a Form 8962, to prove that you actually were poor enough to have the government pay part of your healthcare costs. The Pennie website assesses your eligibility at the start of the year, using your prior year numbers, and then the IRS looks at these other forms at the END of the year to see if you maybe somehow earned extra money that could have unqualified you during the year so that they can then takesies backsies the assistance you turned out to not-actually-need under their model.
I didn't know about this because I didn't do the Pennie thing until Pandemic (when I had a lot of free time because work was in... a semi-shut-down mode). For the 2020 tax year, the government waived the "1095-A and Form 8962" filing stuff so nobody had to do it. But, for 2021, you were supposed to file these forms. I did not.
Oops. Hence the letter from the IRS.
People get all horrified by letters from the IRS but, while I do not enjoy them, it's not that big of a deal. You read the letter. You respond to the letter (in writing) and provide your alternative version of events or (in this case) send them the forms you neglected to file. How do you know what forms they want? They tell you.
"Send us the following documents:
---- A completed Form 8962
---- A copy of your Form 1095-A"
Okay, then. So, I sent the forms back. The letter explicitly said not to send them any money or a 1040x (the form for a revised tax return) or anything other than what they explicitly asked me to send.
Now, during 2021, an S-corp company that I own stock in received a payoff for a contract of sale on a building. This was somewhat unexpected but the upshot was that I received $30K more in income for the year than I had expected to receive. So, I wound up being not-so-eligible for government assistance on the insurance front. Nobody was doing anything bad, dude buying the building just secured a commercial mortgage through a bank at a lower interest rate and paid off the balance due on his contract of sale.
Anyway, this is why the takesies backsies provision is important.
The forms I sent back show an "overage" of assistance of $5688 that I will have to send to the government. I expect a letter from them dunning me for the money in fairly short order, at least on the IRS time scale for "short order".
INTERESTINGLY, the government PAID FOR $7798 worth of insurance for me (on a year in which I made 778% of the poverty line for a single individual in the continental 48) so even though I reported an income of ALMOST 100K AND even though I will have to pay back the $5688 of "overage", the government still gave me $2110 in healthcare assistance. I am not sure why they did that, but I am not going to argue with $2K of government money.
I think we pay too much for healthcare in this country.