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Covered California Q&A

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.


How IRA Withdrawal Affects ACA Subsidy?

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Question: I took out $20,000 from my IRA, I believe it raised our income to $47,000 which normally be around $27,000. I did not report this change as I am confused on what is Income, if I do not count on that money yearly nor will I 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: Since you are collecting monthly premium assistance in the form of tax credits based on an estimated annual income of $27,000, your excess tax credits for actual 2017 income of $57,000 will have to be repaid when you file your taxes for 2017. Assuming you do not plan to make another IRA withdrawal, I suggest you do not change your stated income in your Covered California account, because your 2018 income will return to to about $27,000 and you’ll be back on track will a minimum of complications.

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