I am $21 (400.13%) above the Federal Poverty Line pertaining to qualifying for the Premium Tax Credit (PTC). Will the IRS work with me or will I have pay back the entire advanced payment ($2,310) of the PTC? Did my best to stay within the income range but a $40 dividend increase put me over. Any suggestions or ideas on how to solve this problem? Thanks in advance!

  • IRS doesn't have an option to reduce the amount of the repayment. They do have some options as to how you pay. Although they don't publicize it, IME they will on request give you a 60-day 'grace' past the official due date (April 15), if that helps any. And for an amount that size you qualify automatically for an installment agreement potentially up to 6 years -- although that charges interest, and requires a setup fee (which is minimized if you do it on the website and pay by ACH). – dave_thompson_085 Feb 14 at 6:40

The instructions for Form 8962 imply that you must hit 401% (which you wouldn't) in order to be disqualified entirely. Try filling out the form and see if you hit 401%.

Alternatively, you can lower your Adjusted Gross Income (AGI) by contributing to a traditional IRA or a Health Savings Account (HSA). These contributions can be deducted from your AGI if made before April 15. For an IRA contribution check out Form 8880 and for HSA, use Form 8889. Since you're only over by a little bit, you wouldn't need to contribute much ($21) to get below the limit.

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  • The worksheet for Line 5 says to enter 401 as long as line 1 (line 3 of Form 8962) is more than 4 times line 2 (line 4 of Form 8962). Given the OP's description, it seems they would have to enter 401%. – user102008 Feb 13 at 18:33
  • As mentioned above, I hit the 401 mark on the worksheet. We don't qualify for an HSA as we are now both on Medicare. For the IRA we may not qualify due to lack of earned income. We're working on this. Thanks for the input. Any other ideas would be much appreciated! – L L F Feb 13 at 21:57

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