IRS to take flak for 2015 Obamacare clawbacks.

So concludes Politico.

I think the clawback is something for people to be concerned about, as I wrote very early this year. Knowledge is power, though.

People who receive the Advance Premium Tax Credit (APTC), otherwise shorthanded as the “subsidy”, may have to pay part, or all, of it back in 2015, if they have a good 2014. A good year would be one where they make more than what they did in 2012 (or 2013 if that’s the year the IRS uses to calculate APTC in the next couple months.)

I already know that I am likely to be subject to the clawback—and that’s OK. The stories you are going to get, though, over the next year or two, are from people who DON’T realize the “advance” part of the tax credit. It doesn’t get called a credit, it gets called a “subsidy”. It doesn’t get called “advance”, and so people think it’s theirs to keep regardless.

When people know the exact details of the law, they are almost always happy the new law is here. It’s when people are led to think other things about the law, that all this upset occurs.

If you think you are going to be over the 400% FPL level for 2014, and you have the ability to reduce adjusted gross income (front page, bottom of the return income) by things like an IRA or a Health Savings Account, then do it. Take knowledge of the real rules of the law, and use it to your advantage. Don’t buy into the myths and stories, or the SHOCKING HEADLINES!!!!, and not do the things you should get the full benefit of what is here, now, and permanently.

(P.S. you’d think the IRS will have a few paragraphs in their “what’s new in 2014” section of the 1040 instructions, explaining APTC and the clawback/reconciliaton in 2015.)

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