How is this table generated? (Form 8962)

Line 7 ("Applicable Figure") on (IRS) form 8962 ("Premium Tax Credit") comes from a table in the form's instructions. The table has 167 entries, one for each 1% step in the MAGI/FPL ratio.

If I plot this table (x = MAGI/FPL, y = "Applicable Figure"), it is a curve. The best fit I've come up with is either a 3rd-order polynomial (1) or a logrithmic (2) function. Both are 'close enough', in an engineering sense, but deviate from the specified "applicable figure" by as much as 5 places. (eg, a value of 0.0629, instead of

0.0634)

This would not be a big deal as far as calculation; but, (a) they do want the value entered on line 7, so the wrong value could be problematic; and (b), more significantly, I just wonder how the table was generated in the first place.

ISTM, they would pick the end points, choose some mathematical function whose shape fit their fancy, and then just write the table values that the function computed. That does not seem to be the case.

I would appreciate hearing any insights or speculation on this.

NB: my equations are ...

(1) y = (-8.5159 + 12.0268*x - 2.9509*x^2 + 0.3146*x^3)/100

(2) y = (7.9908*LN(x) + 0.7212)/100

... where x = (MAGI/FPL)/100 (IOW, 1.33 - 3.00, over a table span of

133 - 300)
Reply to
g315
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You're over-estimating the sophistication of the table. The plot should actually just resemble a concatenation of linear functions. The applicable percentage is based on these parameters:

up to 133% 2.0% - 3.0%

133%-150% 3.0% - 4.0% 150%-200% 4.0% - 6.3% 200%-250% 6.3% - 8.05% 250%-300% 8.05% - 9.5% 300%-400% 9.5%

A quick spot check indicates that each segment is just a straight-line mapping.

Reply to
Mark Bole

More like, under-thinking it. I took one look at a plot of the numbers in Excel, decided it was just so much a curve, and just completely dismissed this possibility. So, thanks - it's hard to guess how far I might have gone down the wrong road

Egg on my face.

Reply to
George

responding to

formatting link
Peg Phillips wrote:I don't know the math, but here's the law:

36B(b)(3)(A)(i)In general.? Except as provided in clause (ii), the applicable percentage for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier:

In the case of household income (expressed as a percent of poverty line) within the following income tier: The initial premium percentage is? The final premium percentage is? Up to 133% 2.0% 2.0%

133% up to 150% 3.0% 4.0% 150% up to 200% 4.0% 6.3% 200% up to 250% 6.3% 8.05% 250% up to 300% 8.05% 9.5% 300% up to 400% 9.5% 9.5%

36B(b)(3)(A)(ii)Indexing.?

36B(b)(3)(A)(ii)(I)In general.? Subject to subclause (II), in the case of taxable years beginning in any calendar year after 2014, the initial and final applicable percentages under clause (i) (as in effect for the preceding calendar year after application of this clause) shall be adjusted to reflect the excess of the rate of premium growth for the preceding calendar year over the rate of income growth for the preceding calendar year.

Reply to
Peg Phillips

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