Factoring mid-year emigration into ACA subsidy application

November 5, 2022 12:20 PM

My husband, US/UK dual citizen, expects 5 months salary in 2023 on his current contract, and then we are selling my house and moving to Glasgow. Employment for either of us in UK during 2023 is unknown. What should I be factoring before submitting our application through healthcare.gov this year regarding our income?

Is [monthly salary] x5 as our expected 2023 income asking for a heap of trouble? Are there any specific resources that deal with how AGI is calculated if a year includes an international move? I assume the house sale is not considered income for ACA purposes, but is that wrong?

I'm having the hardest time figuring out what to google to try to minimize big tax mistakes that I'll have to deal with from another country.

posted by droomoord to Law & Government (1 answer total)

Best answer: The Premium Tax Credit is based on your estimated Modified Adjusted Gross Income, which healthcare.gov says "is adjusted gross income (AGI) plus these, if any: untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest." So you should make a good faith ballpark estimate of what you think your income will be for the year.

The Premium Tax Credit is calculated based on your income, family size, and zip code for each month you're enrolled in an ACA plan.

House sales are not counted as income, unless you did it as a business (e.g. if you're a realtor or part-time house flipper).

You don't have to take all of the Premium Tax Credit you're given, if you're concerned that your income may be more than what you estimate for the application. You can choose how much of the credit to receive in advance to lower your premiums each month, and how much you want to receive at tax time, if you're unsure of what your total income will amount to. If you have an income of less than 400% of the federal Poverty Level, there are also limits to how much you'll have to pay back if you received more Tax Credit than you qualified for (see IRS Pub. 8962, p.16).

Note that you do have to reside in the United States to be eligible for ACA insurance -- so if you're permanently moving out of the country, you'll need to report that to healthcare.gov so they can cancel your insurance (and any future Advance Premium Tax Credit.
posted by Theiform at 2:48 PM on November 5, 2022