What if I show a negative AGI Line 8b  or MAGI Income.
Can I get subsidies?
Medi-Cal?
Buy a regular Plan?

What if I have income from a job, rentals, business or other?

First, let’s look at the definition of MAGI income on that webpage or the definition in Publication # 974

 

Modified AGI.  MAGI For purposes of the PTC, modified AGI is the AGI on your tax return (line 8b of 1040) plus certain income that is not subject to tax (foreign earned income, tax-exempt interest, and the portion of social security benefits that is not taxable)
.
 
Second –  To be an applicable taxpayer, you must meet all of the following requirements.
 
a. your household income is at least 100% but no more than 400% of the Federal poverty line 600% in CA for your family size (see Line 4 in the Form 8962 instructions) – Publication 974 page 4 –
 
However, if Covered CA (Market Place) estimated your income qualifies and actually gave you a subsidy APTC then you can take the credit.
 
However, IMHO check with competent tax and legal counsel, with a tax loss and it lowers line 8b adjusted gross income  and you don’t have the add ins for MAGI income, you can’t get subsidies.

​2019 1040 Form   

Line 8b Adjusted Gross income then add line 2a, 5a &

7a (Foreign Income)

to get Covered CA MAGI Income

 

2019 Schedule 1  Additional Income & Adjustments to Income

This is one of those unintended consequences of the PPACA

 

The law says APTCs are obtainable by persons with MAGI of 100%-400% [600% CA] FPL.  This is a unique situation and I don’t believe Congress expected this as the norm.  But the law is the law, and the IRS will either allow or disallow the APTCs.

Personally, I think the IRS will allow the APTCs since this person is obviously a “taxpayer” not a welfare recipient.  Otherwise, it would make a great case in Tax Court.   MAX  max herr insurance services.com

 reply from Covered CA —

Response By Email (R) (02/10/2016 12:22 PM)

Good day Steve Shorr,   Once you update their income, and it’s reflecting the negative income then they will be up for review.  Please let me know if you need further assistance.

Solutions?
.
 
 
 
Note though that Covered CA doesn’t agree with me, that going into Medi-Cal is a loss of coverage.
 
Another problem is, no subsidies!

Get quotes here for CA,

A tax loss occurs when
 
total expenses are greater than total revenues under the tax reporting rules of the applicable government jurisdiction. A tax loss reduces an entity’s tax liability only in proportion to its tax bracket.
 
Businesses and individuals will frequently reduce their reportable revenues or increase their reportable expenses for tax purposes in order to reduce their tax payments. Thus, an entity may report a tax loss at the same time that it reports a profit under generally accepted accounting principles or international financial reporting standards. Accounting Tools.com

If you qualify for Medi-Cal, no one can force you to use it.  You can still buy a regular policy from any Insurance Company.  No extra charge for our services.  You just won’t get subsidies.

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Detailed Video Instructions on using our Quote Engine

How to use our FREE Quote Engine, Subsidy Calculator  and get the MOST from the experience.

When you get a FREE quote, you can also see the benefits, view actual brochures, MD and Hospital Lists all ONE easy process with no obligation & it can be anonymous.   Enter your zip code, date of birth, family – household taxation relationships (MAGI – Definition),    Estimated MAGI – Modified Adjusted Gross Income for the upcoming – current year.  Last years tax return only gives an idea so that Covered CA can approve your advance tax credit to help pay premiums.

If you qualify for tax credits – subsidies and want them in advance (Pros-Cons) of filing your taxes click on “Health On Exchange” – Covered CA, illustrated below.

This website and are individual consultation are provided to you FREE of Charge!  We are paid by Covered CA and/or the Insurance Companies to help you.  When you fill out the Covered CA ONLINE Application, just appoint us as your agent under Find Help in the Upper Right Hand Corner so that we get paid for helping you.  Click here for screen shots for more detail of how to do it.  If you prefer, you can pay us a consultation fee in lieu of appointing us as your agent, for educational services only.

You can then see all the quotes on the exchange, showing the Cost Share Reduction – Enhanced Silver  if available, subsidy – tax credit amount and your net premium.    If you click “Off Exchange” you will see more plans and companies which  may have larger provider lists.   Scroll down for more screen shots.

Then click on “View Plan Details” – “View Doctor’s & Providers” – to compare and get more information.  Please note that the quote engine does not show enhanced silver, but shows silver at 70%.  Check our chart for the better silver coverage.   To apply, click on apply now or use the links in the right hand column, ON THIS PAGE, but it will have you redo the quote for that specific company.   The price is the SAME, no matter if you use us, go direct to Covered CA or the Insurance Company, as mandated by law!  If applying through Covered CA, be sure to sign the form to appoint us as your agent.  It’s not all the easy to figure out how to do it on their website.

 If you have any questions email [email protected] or call us 310.519.1335

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7 comments on “Tax Loss – Negative MAGI Income – Medi Cal? Subsidies?

  1. I have a wife and 13 year old daughter. Our household income is under $40,000.00 BUT, thanks to a hefty loss carryforward, my MAGI is -$150,000.00.

    Is there any way to get covered California, at least for my wife and daughter (I have Medicare)?

      • 1 This year I am earning $20,000.00. I have Medicare Advantage. My wife and daughter currently have Medi-Cal.

        2 I’ve just started receiving Social Security which will be $22,000.00 next year. If I continue earning $20,000.00 from working, our total income of $42,000.00 will knock my wife out of Medi-Cal, at least as I understand it.

        3 My daughter, however, can continue with her Medi-Cal.

        4 This is why I’m looking at insurance for my wife and not necessarily for my daughter.

        5 If we have to pay $12,000 to $15,000 for health insurance, maybe I should stop working and leave my wife (and daughter) on Medi-Cal.

        • 2 Here’s the income chart for Covered CA While $42k would put you in Silver 73, the chart goes by MAGI Modified Adjusted Gross income that is Line 37 Adjusted Gross Income of your tax return, plus Social Security (It might not count in full), Foreign Income and Exempt Interest.

          Your tax loss would show on line 13 or 14, right? Thus as a negative number it would make your $42k below zero, right? Thus, since your income is below $34k for a family of four, that would put you in Medi-Cal and not subsidies.

          I’m not a CPA or tax attorney. Please review the Government Documents cited, this website and our Medi-Cal website, Western Poverty Law and go over them with appropriate counsel.

          4. If you put your mouse over the premium on my quote engine, it will show the premiums for each person.

          5. There are some who say that Obamacare will die on it’s own. The Middle Class can barely afford their own premiums, let alone the subsidies and Medi-Cal.

            • Letters from Covered California / MediCal said that with our household sized our household earnings could be up $2,2014.08 per month for my wife to stay on Medi-Cal and $4,527.00 for my daughter to stay on Medi-Cal.

              The renewal forms ask about our monthly earnings (wages) and income (I assume this includes Social Security) and nowhere mentions MAGI so it’s quite a surprise to me to find that our qualification is MAGI-based.

              I need to thank you for letting me know this.

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