We had a call come in from someone we did not know. They were unemployed for over a year, but received health insurance from the ACA exchange. They were getting the subsidy and did not want to have to pay it back.
So they were looking for ways to show income without showing income from a taxable source. The person had been receiving funds from the parents to cover their lifestyle. State unemployment had run its course in a prior year.
Apparently they were choosing to not be Medicaid eligible and to have better health care, but the subsidy was just shy of $3,000 and they did not want to have to pay it back.
We talked briefly about a couple of options, but they did not want to incur any fees. So they did not want to come in and discuss real options. Granted, we like to help people but we do need to be paid so we can continue to help people.
The funds they receive from the parents could possibly be added to 1099 for services. Qualified funds could be hit. But the tax costs of those options are somewhat steep.
Not having all of the details we can’t really speculate on what our advice should have been. But it would have helped to have a plan in place for such a contingency, since the person was unemployed for well over a year, possibly two.
On a quick review, repaying the subsidy may be the cheapest approach…