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Level 3
December 7, 2019
Solved

Premium tax credit client was below the poverty limit in 2017 but exceeded in 2018, self employed. Applied for Covered California based on 2017 income Any relieve

  • December 7, 2019
  • 1 reply
  • 13 views
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Best answer by TaxGuyBill

Assuming that you mean 400% of the poverty limit, no.  The credit is based on the actual income, and there are no limitations for the repayment.

However, you did mention the client is self employed.  Assuming they filed an extension, would contributing to a SEP be enough to lower their income below 400%?  If so, that could be quite beneficial (in some cases, saving many thousands of dollars).

1 reply

Level 15
December 7, 2019

Assuming that you mean 400% of the poverty limit, no.  The credit is based on the actual income, and there are no limitations for the repayment.

However, you did mention the client is self employed.  Assuming they filed an extension, would contributing to a SEP be enough to lower their income below 400%?  If so, that could be quite beneficial (in some cases, saving many thousands of dollars).