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No Tax Filing, No Subsidy?

By on | 13 Comments

Question: Per IRS and Ca State law (I have letter from CA confirming I don't have to file ) I don't file yearly taxes... I was denied and the lowest cost is 16% of my monthly income...Why does it matter ? Why is everything centered on tax filing?

Answer: You remind me of the car crash driver who refused to stop because he had the right of way. How much are you will to spend to make a point? The Covered California application requires you to promise to file by 4/15/15 for the 2014 tax year, so why not file for 2013 as well, then you would be able to answer "yes" on both counts and be eligible for all that IRS money. Yes, IRS money: that's why they have a say in your eligibility for tax credits.


Bruce …

It is CoveredCA’s responsibility to correctly report the total amount of Advanced Premium Tax Credits it paid to your insurer in 2014. You and others are supposed to receive the Form 1095A not later than January 31, 2015 (same deadline as for W-2s and 1099s).

If your 2014 Modified Adjusted Gross Income (MAGI) is less than your stated income when you applied through CoveredCA, then you may be eligible for additional credit, which will be calculated and “reconciled” when you file your return.

You MUST file your return on or before April 15, 2015. You cannot file for an extension! However, if, after filing your return by April 15, you discover that there was an error, or you underreported income or tax withholding, you can always file a Form 1040X to make those changes.

We’ll see if CoveredCA manages to deliver the Form 1095A on time. Be advised that it is the taxpayer’s responsibility to know whether the amount reported on Form 1095A is correct or not. This will not be easy because CoveredCA only shows a household’s “Net Premium per month” and not the total premium payable in the Individual online account.

I don’t know if the Call Center will be able to answer the question. As an agent, I know I probably cannot because I did not keep a record of my clients’ premiums or APTCs and that information is no longer stated in the Individual Account for 2014. In the spreadsheet CoveredCA sent to agents last month with our “book of business” there is a column for them to report the “Old Gross” premium amount, but that column is blank on my spreadsheet, as is the column labeled “Income Used to Calculate APTC”. This leads me to believe CoveredCA might not actually have it either — but they should.

If one received healthcare subsidies in 2014, which entity notifies me with the information regarding the total amount received so I can correctly file my 2014 Fed Tax return in April of 2015 and reconcile. I inadvertently overstated my estimated income for 2014 when I applied through Covered California in 2013, so I am assuming an additional credit would be available. Thank You Bruce

Deep is 100% correct. “Mon” is acting/writing in a completely irrational manner.

We live in a democracy. Taxes are the price we pay for that. If course, no one should pay more in taxes than necessary, and the government has a responsibility to use the revenue it has available in a wise manner.

Therein lies the problem: some people do not pay their fair share, others pay too much, and the government spends more than it has the ability to cover with the revenue it has available.

If any of us “ordinary citizens” acted in the same irresponsible manner, we’d be in prison. Enough said.

So if the price of receiving a tax credit is to file a tax return, so be it. If you don’t want to play the government’s game, you don’t have to ask for and accept the tax credits.

Some “poor” people even have a problem cashing the free check given to them.

What are you expecting? Ed McMahon to pull up in a Limo, knock on your door , and unload a bundle of cash?

There has to be a minimum of paperwork to make sure the public money is used for appropriate purposes. Otherwise the system will be rife for abuse.

Having a tax return filed is the least you can do if you want to avail of the benefit.

This thread is a complete waste of space.

mo”n writes “Not helpful. Covered California is State. Does not explain anything. Not even IRS requires filing.”

Sir, you are making no sense. Tax filing costs nothing other than the price of an envelope and a stamp. Perhaps you are confusing tax preparation with tax filing. But that’s a different story.

You’re ranting about poor people makes no sense. If you don’t make enough money to be required to file a tax return you qualify for Medi-Cal, and are not eligible for Premium Tax Credits.

It also makes no difference that CoveredCA is a state-based exchange, they must follow the federal rules. If your income is sufficient enough to make you ineligible for Medi-Cal (>138% FPL), then you qualify for premium tax credits. But to get them, you will have to file a tax return.

There are plenty of no-cost tax preparation services for low-income persons, so your argument fails completely.

The IRS is not “in control of health insurance” — it is simply the most appropriate agency to calculate tax credits. If you harbor animus against the government/IRS, fine, but it’s your choice to play the game or go home mad.

“Do not file a federal income tax return if you do not meet the filing requirements and are not due a refund.” Fine, if you aren’t getting a refund, which would include Premium Tax Credits, then you have nothing to worry about.

You continue to argue non-issues, and have never stated what it is that offends you in particular. Why not tell the world what’s really bothering you. Everything that has been posted in response to your complaints has been accurate and informative to all but you.

You quote the IRS as telling you “you should file a return to get a refund even if you are not otherwise required to file a return.” This is the same information I posted above in less complex language, and which you characterized as “arrogant.” I give up.

Another very helpful irs link on tax credit how it works:


Additionally, no one is denied APTCs by CoveredCA unless they cannot prove income or are otherwise ineligible. It is not dependent on prior tax filings, and all you have to do is check the box “YES, I plan to file a tax return next year”.

What you choose to do in 2015 is your decision. Don’t file a return and see what trouble you’ll cause.

As I previously wrote, if you are not required to file a tax return, your income must be very low, and you should therefor be eligible for Medi-Cal and have no need for APTCs to pay for insurance.


Well, this certainly is a dilemma, isn’t it? Did you want to claim a Premium Tax Credit or not? If you do, you will have to file a federal tax return for 2014 in 2015. And you will have to purchase your health plan through CoveredCA.

Don’t have to file a tax return? Fine … if you don’t want the APTC, don’t file a return.

But the primary reason a person would not have to file a return is lack of taxable income. If that’s true, you are probably Medi-Cal eligible and should not be paying for health insurance.

So … I think there needs to be a little more disclosure behind the rant. What’s the true issue regarding not filing a tax return?

I found your response unhelpful and arrogant.

Here is some specific information from IRS site that does answer my question in a factual and accurate way:

Do not file a federal income tax return if you do not meet the filing requirements and are not due a refund. 

If income tax was withheld from your pay, or if you qualify for the earned income credit, the additional child tax credit, the health coverage tax credit, or the American opportunity credit, you should file a return to get a refund even if you are not otherwise required to file a return.

I hope that you will be willing to post this comment.

IRS in charge of health insurance is certainly a crash in the making. Government oversite leads to government power/control.

Not helpful. Covered California is State. Does not explain anything. Not even IRS requires filing. It Costs MONEY to pay for Tax Filing. Poor people don’t have money to throw away. Nowhere did people get informed that IRS would be in control of Health Insurance. Goverment Control, not help.

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