Question: what is the penalty if any for someone who claims more income than they actually achieve? If someone earns a income that qualifies them for Medi-Cal but they inaccurately predict a income that would qualify for a substantial subsidy, then what is the practical outcome of this error? What is the maximum that someone would be penalized for after overstating their income? I doubt that there would be any practical penalty. Prove me wrong.
Answer: In the scenario you describe, you would be liable to repay no more than $300 for the year. The following is a more complete answer to the "clawback" question provided here in October 2013:
The consumer is liable for repayment of any excess tax credit received in the calendar year. However the amount of the "clawback" provision is limited by the household income according to the ACA law. If the household income (expressed as a percent of poverty line) is :
- Less than 200% FPL, the amount of the clawback is limited to one-half of $600
- At least 200% FPL but less than 300% FPL, the amount of the clawback is limited to one-half of $1,500
- At least 300% FPL but less than 400% FPL, the amount of the clawback is limited to one-half of $2,500.