Don’t Fake Your Income for Covered California
Your Covered California application uses an estimate of what you reasonably expect your household income to be for the coverage year. You are not expected to predict the future perfectly.
Covered California explains that financial help is based on your expected household income for the coverage year. If you are self-employed, work on commission, have changing hours or otherwise have unpredictable income, make the best reasonable estimate you can and update it when circumstances change.
There is a big difference between an honest estimate that later turns out to be wrong and knowingly entering a number simply to obtain the eligibility or subsidy result you want.
An Income Estimate Can Be Wrong Without Being Dishonest
Income changes. You may get a raise, lose work, receive a bonus, have a better or worse business year than expected, sell investments or receive other income you did not anticipate.
- Good-faith estimate: You use the information reasonably available to you and your actual income later turns out differently.
- Knowingly false information: You intentionally enter income, deductions or expenses that you do not believe are accurate in order to change your eligibility or financial assistance.
Covered California does not require you to know exactly what you will earn months in advance. It does expect the information you provide to be based on a reasonable estimate.
Don’t Pick an Income Number Just to Get the Result You Want
Your projected household income can affect both your eligibility for financial help and whether members of your household may qualify for Medi-Cal.
Do not intentionally report income that is lower than you reasonably expect simply to obtain a larger Covered California subsidy. Likewise, do not invent or increase income simply because you want a Covered California plan instead of a Medi-Cal eligibility determination.
Use your best reasonable estimate. If you are unsure what income should be included, review our Covered California MAGI Income Chart and income information and Covered California’s official What Counts as Income guidance.
If Your Income Changes, Report the Change
If your original estimate was reasonable but circumstances change, the solution is generally to update the information — not to worry that your original estimate failed to predict the future.
See our instructions on how to report a change to Covered California.
Covered California members are required to report changes within 30 days. Changes in income, household size, tax filing status, other health coverage and several other circumstances can affect eligibility and financial assistance.
You can also review Covered California’s official How to Update Your Account instructions.
Important for 2026: The Subsidy Repayment Cap Is Gone
Beginning with the 2026 tax year, the previous repayment caps for excess Advance Premium Tax Credit no longer apply.
If the advance subsidy paid to your health insurance company is greater than the Premium Tax Credit you are actually entitled to when you file your federal tax return, the IRS says you must repay the full excess amount. It can reduce your tax refund or increase the amount of tax you owe.
That makes keeping your Covered California income estimate reasonably current particularly important.
What If You Don’t Have Normal Proof of Income?
Not having a pay stub or conventional income documentation does not mean you should make something up.
Covered California lists documents that can be used to verify income. In some circumstances, Covered California may also accept a written self-attestation of income when documentation is unavailable.
Covered California states that income self-attestation is accepted on a case-by-case basis and is signed under penalty of perjury.
If Covered California asks you for proof, respond to the request and explain your actual circumstances rather than creating income or documentation that does not exist.
Your Covered California Subsidy Is Reconciled at Tax Time
Advance Premium Tax Credit is based on estimated information when you enroll. After the year ends, the subsidy is compared with the Premium Tax Credit you actually qualify for based on your federal tax return.
See our explanation of IRS Form 8962 and Covered California subsidy reconciliation.
Generally, your Form 1095-A provides the Marketplace coverage and subsidy information used to complete IRS Form 8962. If too much advance credit was paid, you may owe money. If too little was paid, you may be entitled to additional Premium Tax Credit.
Need Help Correcting or Updating Your Covered California Account?
As a Covered California Certified Insurance Agent, I can help you review the income information entered on your application, explain what information Covered California is requesting, report legitimate changes and review how those changes affect your health plan and financial assistance.
I am not a CPA or tax attorney. I cannot decide whether a particular business expense is deductible, prepare your tax return or tell you what number to put on a tax return. Questions about tax deductions, tax filing positions or correcting a tax return should be discussed with a qualified tax professional.
Appoint Steve Shorr as Your Covered California Agent — No Extra Charge →
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