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

irs 1040 magi income covered ca

 

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.

IRS Publication 974 

Premium Tax Credit
IRS Publication 974

VIDEO What is APTC Advance Premium Tax Credit 

 

aptc interactive assistant

Interactive Tax Assistant (ITA)

Am I eligible to claim the Premium Tax Credit? 

IRS FAQ on Premium Tax Credit

 

Tax Estimators

 

 

ACA What You Need To Know  #5187 ACA What you need to know # 5187

Health Net VIDEO
How to get subsidies – pay less for coverage 

 
 
Kaiser Foundation reports that 27% of uninsured individuals are eligible to purchase a bronze plan with $0 premiums after subsidies in 2019.  Silver plans with cost-sharing reductions (CSR) for single individuals with incomes below 200% of the poverty level can be purchased for roughly $20 to $130 per month after subsidies, depending on an enrollees’ income. KFF *
  Explanation of Advance Premium Tax Credit  – Take Credit now or later

VITA get your taxes done Free  

VITA get your taxes done FREE

Free help to file taxes VITA
Volunteer Income Tax Assistance

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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