A self-employed taxpayer usually reports about $18,000 annual income (line 43). With this kind of income, the taxpayer is eligible for and uses subsidies to help pay for Silver plan medical insurance obtained on the insurance exchange website. As result of hurricane Harvey, taxpayer?s regular Houston business was disrupted and income went down. However, taxpayer was hired to do other work related to repair of hurricane damage and total taxable income came to about $30,000.
As a result, I understand that the taxpayer will have to pay back to the IRS the excess amount of insurance subsidies that were originally based on a lower taxable income. I don?t see anything that will forgive the amount due because of hurricane Harvey. If there is something, please let me know. The only thing I see is that the IRS may set up a payment plan so that the amount due can be made in payments over time. If that is true, how does the taxpayer ask the IRS to setup a payment plan? Taxpayer has a six month extension for 2017 taxes so there is plenty of time to do this correctly.