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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Overpayment of Tax Credit

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Question: My income currently comes from investments. I do not know for sure what my exact income is until the end of a given year. What happens if I estimate that my income will be above the cut-off for Medi-Cal and enroll in a subsidized plan, but at the end of the year find out that my AGI is below the cutoff. You have stated in other answers that if you qualify for Medi-Cal that you cannot get a subsidy through the exchange. Will all of the advanced tax credits have to be paid back due to my income being to low.

Answer: Yes. If advance tax credits are overpaid any tax year, the overpaid amount will be recovered at the next tax filing by essentially returning the overpaid “tax credit” to the “tax due” column.


During the Covered California application process you can choose to defer some or all of the tax credit to which you are eligible until you submit your tax return for that year. This would be the best option for you if you are concerned with an overpayment of your subsidy.

In the scenario you describe where you overestimate income and it is actually below the Medi-Cal level, there would be no out-of-pocket repayment required.

Can you please confirm your previous answer? It seems like a terrible random predicament.

If your overestimate your already low income and it actually comes in even lower, below the Medical level, you now actually have to now back-pay everything out of pocket? Unsubsidized?

That cannot be true. Seems like such a capricious predicament for a situation when one canot predict his (low) income.

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