Question

Susan and Stan Collins live in Iowa, are married and have two children ages 6 and 10. In 2019, Susan's income is $41,214 and Stan's is $12,000 and both are self-employed. They also have $500 in interest income from tax exempt bonds. The Collins enrolled in health insurance for all of 2019 through their state exchange and elected to have the credit paid in advance. The 2019 Form 1095-A that the Collins received from the exchange lists the following information:

Annual premiums $9,800 Annual premium for the designated silver plan in the state $10,800 Total advance payment of the premium tax credit $9,200

The Federal Poverty Line for a family of four is $25,100.

Table for Repayment of the Credit Amount

	Single	Taxpayers Other Than Single
Less than 200%	$300	$600
At least 200% but less than 300%	800	1,600
At least 300% but less than 400%	1,325	2,650
At least 400%	No limit	No limit

Click here to access the 2019 Applicable Figure Table to use for this problem.

Calculate the excess advance premium tax credit and the repayment amount for 2019.

Round any division to two decimal places before converting to a percent.

Excess advance premium tax credit	$
Repayment amount	$

Answer 1

Solution:

Susan’s Income = $41214

Stan’s Income = $ 12000

Children’s income = $0

Interest Income from Tax exempt Bond = $500

Modified Adjusted Gross Income = $41214 + $12000 + $500 = $53714

Federal Poverty Line for a family of four = $25100

Therefore,

Modified AGI as a percentage of Federal Poverty Line for a family of four = 53714 / 25100 = 214%

Based on the above percentage (Modified AGI as a percentage of Federal Poverty Line for a family of four), eligible credit percentage will be 6.55% (determined by going through the instructions for Form 8962).

Therefore,

Eligible credit available = Modified AGI x Eligible credit percentage

= 53714 x 6.55% = 3,518

Annual premium for the designated silver plan in the state = $10,800

Therefore,

Excess advance tax credit = 10,800 - 3,518 = $7282

Excess advance payment of premium tax credit or Repayment amount = 9,200 - 7,282 = 1,918 (limited to maximum cap of 1550)

Excess advance tax credit = $7,282

Repayment Amount (Excess advance payment of premium tax credit) = $1,550