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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.


Will IRA Withdrawal Cause Subsidy Refund?

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Question: My Husband took out 20,000 from his IRA, I believe it raised our income to 47000 which normally be around 27,600 with half of his SS and my rental income. I did not report this chanage as I am confused on what is Income, if we do not count on that money yearly nor will we have it ever again, how do I calculate or preview plans that are based solely on our 'Income' and not extras, as not to over pay.

Answer: Yes.Based on what you've told me, your taxable income for 2014, will be about $47,000. Since you are collecting a monthly subsidy based on an estimated income of $27,000, your excess subsidy will be about $1,700 for 2014. What that means to you is, your tax bill for 2014 will increase by $1,700. I suggest save up the $1,700 to pay the additional taxes in April, but do not change your income with Covered California. That's because in 2015, your income will return to to about $27,000 and you'll be back on track will a minimum of complications.

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