We've written before about ObamaPlan subsidy clawbacks:
"The IRS demanded John payback the subsidies he had already received ... In order to pay back what he owed John took out a 2nd mortgage on his home."
John may have gotten off lucky. Thanks to longtime FoIB Joe Kristan, we learn about the McGuires:
"In 2013, the McGuires had consulted with their state ACA exchange, Covered California which determined ... they were entitled to an advance premium assistance credit of $591 per month"
[ed: APAC/APTC = subsidy]
They dutifully took CC's word for it, and signed up for a plan with a $1,200 per month premium [ed: redefining the term "Affordable Care" in the process], but for which they were only responsible for about half. The other $600 came out of your and my pockets.
It's critical to remember that this whole kerfluffle took place in 2013, which, as regular readers will recall, was Open Season v1.0. So what came next should come as no surprise:
The family's fortunes took a turn for the better later in the year, when Mrs McG landed a job that paid her enough money that it kicked the family out of the subsidy eligibility pool. Which they would have known if they'd bothered to read their mail...
Oh, wait:
"Unfortunately the McGuires never received the letter ... during Covered California's first open enrollment period, Covered California was so busy that it was not uncommon that changes were not implemented."
Turns out, the family had moved, and had been trying - unsuccessfully, it turns out - to notify the rocket surgeons at their state's Exchange. Since that never happened, they never got their letter. The upshot of which is a rather hefty example of the aforementioned clawback:
"The IRS, of course, did know about the credit and ... determined that [The McGuires] did not qualify for the $7,092 credit and increased their tax liability by that amount. As is routine the IRS threw in an accuracy penalty."
Because of course they did.
The McGuires of course protested, but to little avail. The bottom line is that, through no (apparent) fault of their own, they're going to have to repay the $7,092 credit (but the penalty was waived).
But that's not really the point of this post.
Hunh??
Well, it was important to lay out the facts, but gets us only so far ("necessary but not sufficient").
So, kudos to Mr Reilly for doing a great job explaining the who and when, and (to the extent possible) the why.
But I'm calling a flag on this play::
"I kind of object to the "Pay Back". It implies that the McGuires received something." [emphasis added]
Um, Peter?
That's because they did; there's no "implication" about it. Plain and simple. No one "earns" a subsidy, they're "eligible" for it. They don't even have to take it. This is the very definition of "relying on the kindness of strangers:" they are tax dollars paid for by thee and me.
Or at least me.
'Nuff said.
"The IRS demanded John payback the subsidies he had already received ... In order to pay back what he owed John took out a 2nd mortgage on his home."
John may have gotten off lucky. Thanks to longtime FoIB Joe Kristan, we learn about the McGuires:
"In 2013, the McGuires had consulted with their state ACA exchange, Covered California which determined ... they were entitled to an advance premium assistance credit of $591 per month"
[ed: APAC/APTC = subsidy]
They dutifully took CC's word for it, and signed up for a plan with a $1,200 per month premium [ed: redefining the term "Affordable Care" in the process], but for which they were only responsible for about half. The other $600 came out of your and my pockets.
It's critical to remember that this whole kerfluffle took place in 2013, which, as regular readers will recall, was Open Season v1.0. So what came next should come as no surprise:
The family's fortunes took a turn for the better later in the year, when Mrs McG landed a job that paid her enough money that it kicked the family out of the subsidy eligibility pool. Which they would have known if they'd bothered to read their mail...
Oh, wait:
"Unfortunately the McGuires never received the letter ... during Covered California's first open enrollment period, Covered California was so busy that it was not uncommon that changes were not implemented."
Turns out, the family had moved, and had been trying - unsuccessfully, it turns out - to notify the rocket surgeons at their state's Exchange. Since that never happened, they never got their letter. The upshot of which is a rather hefty example of the aforementioned clawback:
"The IRS, of course, did know about the credit and ... determined that [The McGuires] did not qualify for the $7,092 credit and increased their tax liability by that amount. As is routine the IRS threw in an accuracy penalty."
Because of course they did.
The McGuires of course protested, but to little avail. The bottom line is that, through no (apparent) fault of their own, they're going to have to repay the $7,092 credit (but the penalty was waived).
But that's not really the point of this post.
Hunh??
Well, it was important to lay out the facts, but gets us only so far ("necessary but not sufficient").
So, kudos to Mr Reilly for doing a great job explaining the who and when, and (to the extent possible) the why.
But I'm calling a flag on this play::
"I kind of object to the "Pay Back". It implies that the McGuires received something." [emphasis added]
Um, Peter?
That's because they did; there's no "implication" about it. Plain and simple. No one "earns" a subsidy, they're "eligible" for it. They don't even have to take it. This is the very definition of "relying on the kindness of strangers:" they are tax dollars paid for by thee and me.
Or at least me.
'Nuff said.