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Can I use a rollover from a traditional to Roth IRA to meet the minimum income necessary to qualify for ACA subsidies in 2022? I do not qualify for Medicaid, and am buying insurance for a family of four in New Hampshire. I am lucky enough to be able to take a year (or two) off work at age 36 and do not plan to work in 2022, meaning I will have little income this year.

Example: $4k of earned/W2 income in 2022, $10k realized capital gains, $5k dividend income = $19k total. Since NH expanded Medicaid, I believe I need an income greater than $36,570 to qualify for an ACA subsidy leaving a $17,570 income gap to qualify for a subsidy. (Is that correct?)

Can I rollover $17,570 from a traditional IRA to a Roth IRA to raise my MAGI high enough so I have $36,570 in total 2022 income to qualify for a subsidy?

All of the answers I find on this topic are about keeping your MAGI under a limit to qualify by avoiding rollovers, so it sounds like this should work but wanted other opinions. Thank you!

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    $36,570 (for 4 persons in lower48) is the maximum for Medicaid expansion = 138% of Federal Poverty Level (133% nominal plus 5% disregard), but the minimum for APTC and CSR is 100% FPL = $26,500. Jan 5 at 1:51
  • Thanks for the clarification, that confused me. Does that mean if I did buy an ACA plan (and did not elect to go with Medicaid) with an income of $26,500, I'd still qualify for APTC and CSR?
    – Jeff Begin
    Jan 5 at 16:33
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    No, you can't 'elect' out. If you are eligible for other affordable minimum essential coverage (which Medicaid is), you don't get [A]PTC (either advance or at-filing) or CSR. But if you 'expect' your income to be say 140%FPL, which would make you ineligible for Medicaid, and your income 'turns out' to be less so you become eligible, the exchange's initial determination stands and you remain eligible at least for [A]PTC; I'm not entirely sure about CSR (I find the CMS website much less helpful than the IRS one). ... Jan 7 at 0:54
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    ... That said, normally they automatically use your last-filed tax return to 'confirm' income (i.e. your 2020 return, filed in 2021, for 2022 coverage) and if you tell them different they will probably want evidence. (This sort of happened to me; after ARPA was enacted, my state exchange insisted I apply for 'assistance', but I expected higher income this year and couldn't provide the documentation they wanted since it hadn't happened yet. They threatened to stop the APTC -- a month after I turned 65 and got Medicare and dropped exchange coverage.) ... Jan 7 at 1:05
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    ... I would do that once at most, though. If you persistently estimate income that qualifies you and then mysteriously vanishes, they may get suspicious. (And remember if you get APTC, you must file 1040 with 8962 to reconcile it, even if you don't otherwise have a filing obligation.) Jan 7 at 1:06

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While flinty New Hampshire has attempted to implement a Medicaid work requirement and asset test, they are not in effect in 2022 and their prospects are dim for future years. All members of your family may in fact qualify for Medicaid. Once you start working again and are dropped from Medicaid after reporting your income, your family will have a special enrollment period for a new plan.

If intent on ACA, yes, taxable IRA distributions are part of MAGI. A Roth conversion should work.

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