Question: My income went up during the year, si I guess I’ll have to pay some of the subsidy back. How do they handle that?
Answer: If you are paid too much premium assistance during the year, the IRS will recover some of it through your tax return. The subsidy overpayment is added to your taxes due for the year. You can avoid having to repay excess premium assistance in several ways.
- If your income increases during the year, update your Covered California account to reflect the income change and your subsidy will be reduced going forward.
- You can elect to take less premium assistance on a monthly basis or
- you can take all of your premium assistance in a lump sum at the end of the year.