NYC Health Insurance Tax Credit Question
July 20, 2021 5:19 PM Subscribe
I'm self-employed and get my health insurance through the NY exchange. I earn too much to get tax credits, but I guess because of some Covid legislation, they've widened the eligibility, so now I AM eligible, but I can't figure out how to show it. Do you know anything about this?
Filling out the form, it asks for my earnings over the last three months. I earn 1099 income exclusively, so I looked back at my adjusted gross income for previous years. I used 2018 as my base, because my earnings this year will be similar to 2018. I divided the AGI by 12 to get a rough monthly net figure. The tax credit isn't earth shattering but big enough that I'd certainly like to claim it.
But here's the problem. It's asking for some verification of my stated earnings. The only pertinent form they suggest is last year's tax return. But my 2020 earnings were significantly more than what I'll earn this year (unless something CRAZY happens in the next five months). Is it conceivable that they'll accept my 2018 return? Or, if not, is this a tax credit that I can get retroactively when my accountant does my return next April?
Filling out the form, it asks for my earnings over the last three months. I earn 1099 income exclusively, so I looked back at my adjusted gross income for previous years. I used 2018 as my base, because my earnings this year will be similar to 2018. I divided the AGI by 12 to get a rough monthly net figure. The tax credit isn't earth shattering but big enough that I'd certainly like to claim it.
But here's the problem. It's asking for some verification of my stated earnings. The only pertinent form they suggest is last year's tax return. But my 2020 earnings were significantly more than what I'll earn this year (unless something CRAZY happens in the next five months). Is it conceivable that they'll accept my 2018 return? Or, if not, is this a tax credit that I can get retroactively when my accountant does my return next April?
I'm self employed (in CA tho) and the short answer is you can basically elect to take as much or as little tax credit as you want, because ultimately for 1099ers whatever you give them is going to be an estimate. I have sent documentation ranging from an old tax return like you have, to just a print out of my invoicing thingies totally unofficial Profit-Loss statement and they've never questioned it or made adjustments to my credit based on it. I think they just want to see that you're working?
If your actual income at the end of the year does not match what the exchange has as your estimated income in their files, the tax credit gets recalculated according when you do your taxes just like any other tax credit. So you either get a refund or bill depending on which way you estimated. The name of it is the Advance Premium Tax Credit or whatever so it's literally just a tax refund you get as an advance payment to your insurance.
In CA at least, I can update my income pretty easily online or through the phone. It's actually easier to do on the phone here. I've asked several times (when i was busy and had the revenue) to "elect to take no tax credit" so I can pay the full bill and they will do so and just tell me to call back and update my income if necessary. They will also tell me, "What do you want to spend on insurance and I can change your income to match that payment." So I don't think it's a huge deal to use an old tax return if you think that's the best estimate.
posted by bradbane at 9:02 PM on July 21, 2021
If your actual income at the end of the year does not match what the exchange has as your estimated income in their files, the tax credit gets recalculated according when you do your taxes just like any other tax credit. So you either get a refund or bill depending on which way you estimated. The name of it is the Advance Premium Tax Credit or whatever so it's literally just a tax refund you get as an advance payment to your insurance.
In CA at least, I can update my income pretty easily online or through the phone. It's actually easier to do on the phone here. I've asked several times (when i was busy and had the revenue) to "elect to take no tax credit" so I can pay the full bill and they will do so and just tell me to call back and update my income if necessary. They will also tell me, "What do you want to spend on insurance and I can change your income to match that payment." So I don't think it's a huge deal to use an old tax return if you think that's the best estimate.
posted by bradbane at 9:02 PM on July 21, 2021
I've done this before in NY, and for self-employed income what they were looking for -- according to the phone representative -- was anything that looks enough like a "profit/loss statement." First I made a text file listing revenue and expenses (by category?), and the phone representative suggested I paste that info into a table/spreadsheet instead, which was then accepted (with a signature, vouching for its accuracy).
posted by nobody at 1:52 PM on July 24, 2021
posted by nobody at 1:52 PM on July 24, 2021
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But in general, all tax credits can be deferred until you finalize your taxes for the year. The document proof on the exchange is needed to lower your monthly payments going forward, but if you are actually eligible at the end of the year you should have no problem getting it deducted from your final taxable total as long as you tell your accountant about it. I'm fairly paranoid about my 1099 income and the estimated tax underpayment penalty so I would not want to bother with this. If you can afford paying your monthly premiums now, I would just not worry about it until it's tax time.
posted by JZig at 5:45 PM on July 20, 2021