GetCoveredNJ Marketplace Application – Self-Employed Questions
A few questions that I’ve always been uncertain about with the healthcare.gov marketplace application and more recently the GetCoveredNJ marketplace application. I’m a NJ resident and I earn my income being self-employed in NJ.
According to this FAQ (https://nj.gov/getcoverednj/findanswers/faqs/), the income we should report is estimated Modified Adjusted Gross Income (MAGI) for the upcoming year (which is basically AGI plus any non-taxable Social Security, tax-exempt interest, or foreign income you have for the year for which you are applying). So if I want to work off of my 2021 tax return, that would be line 11 on my 1040. Is this correct?
(I understand that this isn’t exact since I should be reporting 2023 estimated income, but since my income changes month-to-month this is the only way I can figure to give an approximation)
Now here’s where I really start running into an issue. Line 11 on my 1040 already takes into account deductions from my Schedule 1 (which is line 10). However, according to that same FAQ website above, “You should only count your deductions from your federal income tax filing (Form 1040 Schedule 1)…” and it specifically lists things such as self-employment tax, student loan interest deduction, etc. So I don’t understand if the application wants you to list out these deductions even though the AGI/MAGI already takes them into account? And if I shouldn’t list these deductions in the application because the AGI/MAGI already takes them into account, why does this tell me differently on this FAQ?
It really seems like self-employed people (who perhaps make different amounts each month, like me) end up getting really screwed by the health insurance marketplace system, since there is no real way we can know exactly what our income is month-to-month or year-to-year to figure out what sort of credits we qualify for. In the beginning of the marketplace system, I would always get dinged at the end of the year for APTC I took since I guess each year I would end up making more than the previous year. So I started just not taking APTC and I believe I would be able to reconcile at the end of the year and get any APTC I was entitled to applied to my end-of-year taxes – right? Is that still true?
Along the same lines as 3 above, NJ has something called NJ Health Plan Savings (https://nj.gov/getcoverednj/financialhelp/premiums/) that is similar to APTC. But I’m not clear if I can do the same thing and take little or none of these credits up-front and then reconcile at the end of the year to get them back (if I end up qualifying for some of them), or I have to take them upfront or risk losing them? And then if I do take them upfront and end up being entitled to less than I took or none at all, do I get dinged at the end of the year (the same way I did for APTC previously)?
Any help for any of the above is greatly appreciated. I’m going to try and reach out to GetCoveredNJ to see if they can answer my questions also, but figured I’d post on here to see if anyone could provide faster answers. Thanks!
