Proof of Income & Identify Accepted Documents? Covered CA (2024)

Covered CA (& Medi Cal) - Calculate - #Countable Sources of MAGI Income
Short Summary

What is it that Covered CA is doing by asking for Proof of Income?

What documents do they need?

• First off, let’s get this clear, last years income is MEANINGLESS!
  • Covered CA only asks for it, so that they can see that your income estimate for the upcoming year sounds reasonable.
  • The income amounts get reconciled at the end of the year when you file your Income Tax 1040 with MAGI Income on line 11 and form 8962 Premium Tax Credit verifying what you got in advance subsidies – that is Covered CA pays the subsidy monthly to the Insurance Company and what your current – upcoming tax year income really was.
  • Take a look at the current – upcoming years FPL Federal Poverty Level Chart. We are NOT going by last year but the current or upcoming year! Did your end of the year income really match up to the estimates?
• The best records are your most recent 1040 form.
  • If you don’t have that, see the documents that are accepted by Covered CA to advance your subsidies. Again, note, that just because Covered CA approved you for advance subsides, does NOT mean that the IRS won’t make you give them back when you file your taxes. I’d say 90% of the time Covered CA does NOT ask for proof of income. They verify your income in the “Federal Hub.” If you are married, then you must include both incomesand file jointly.
• Even if you don’t qualify for subsidies or Medi Cal, Covered CA may still ask for documents, just to make sure they are giving you all the benefits that you are entitled to under ACA/Obamacare, ARPA, etc. Also, you might not qualify now, but who knows, you might towards the end of the year, like under ARPA if you lost your high paying job and got 1 week of unemployment, then got another high paying job, you would still get Silver 94 for $1 for the rest of the year 2021! Silver costs more in Covered CA than outside…
• While Covered CA has a list of Countable Sources of Income… That does NOT mean you just count your income! You have to look at MAGI Modified Adjusted Gross Income as there might be deductions.
• Covered CA states that neither they nor authorized agents are allowed to give tax advice!
• Contact Info for Medi Cal where you might be able to ask complex questions.
• Learn more about Understanding Reasonable Opportunity Period (ROP) & Auto Discontinuance Toolkit

#Documents accepted as Proof Of Income

Documents for Proof Of who you are – Identity?

• Copy of last year’s federal tax return along with federal schedule EC. D, that accurately reflects current income
  • Other documents to support Proof of Rental Income –Schedule E
  • Records such as gross rents and expense receipts
• Business records such as profit and loss statements
  • Excel Template
  • Quicken Software
    • how toproduce monthly & quarterly reports.
  • Your Bank’s ONLINE Spending Reports
  • Receipts displaying gross profit and expenses
  • Other documents to support Self Employment Income
• Court papers
  • District Attorney/Family Support (DAFS ) records
  • Copy of pay stub showing garnishment specified for alimony
  • Other documents to support spousal income and child support
• Copy of checks

• Copy of pay stubs

• Sworn affidavit from absent parent

• Award letter or most recent cost-of-living increase notice

• Copy of the current benefit check

• Signed statement from the individual or organization providing the income

• Gift income letter Please check the entire website, our new page on gifts, tax and law professionals for what really is MAGI Income Line 37 of your tax return!

• Other documents to support Proof of Unearned Income – But is it MAGI Income?

• Signed letter from employer that displays the gross income, payment frequency, and date of paycheck

• #Affidavit Covered CAAttestation of Income, No Documentation Available Actual Form Doesn’t require notarization
  • • Things on ACA, Obamacare, Trumpcare are confusing and conflicting –Here’s another opinion
      • If it’s verified by a professional as indicated on Wikipedia then it should be acceptable Therefore, the affidavit must be notarized. The Covered CA verification team is located in the Main Service Center, to get a more definite answer, please reach out to them directly at 800/300-1506.
      • Insure Me Kevin.com 3.29.2017
    • Regardless, if your income estimate changes, you must report it within 30 days!
    • No Perjury * Wikipedia * Shouse Law * Shouse Law Video *
• Other documents to support Proof of Earned Income

• Form 1099

• Investment account statement

• Payment records (notes and mortgages)

• Other documents to support Proof of Interest Income

• Lease or sales agreement

• • • healthcare.gov/income-and-household-information/
• Covered CA Website – proof of income
• coveredca.com/documents-to-confirm-eligibility/

Most of the time Covered CA and Medi-Cal don’t need your proof, they get it from Big Brother and the Federal Hub. They need your consent though. Check out this problem for January 2017 where Covered CA didn’t get consent.

• Jump to section on:
  • Mandate to report changes
  • Proof of Identity Accepted Documents
  • Form 8962 Compare Estimate with the Actual CURRENT tax return
  • Federal Hub Verification
  • Countable Sources of Income

Resources & Links

• Inflating Income to avoid Medi Cal?
• Covered CA Job Aid on Reporting Income
• CA Court Form for Income & Expenses FL 150
• Proving income without a 1099 or W-2?
• appoint us as your agent.
• complementary Instant quote & subsidy calculation engine
• Dependent Children can stay on parents coverage till age 26
• Disabled Children indefinitely
• Married people aremandated to file a joint return.
• MAGI vs Non-MAGI qualification for Medi Cal Page 5 My Medi Cal Brochure

#Report changes as they happen - within 30 days! ^{10 CCR California Code of Regulations § 6496}

10 days for Medi Cal ^{22 CCR § 50185}

Our webpage on ARPA & Unemployment Benefits - Silver 94

IRS Form 5152 - Report Changes

• Our VIDEO on how to report changes to Covered CA
  • VIDEO explanation of how the ARPA Silver 94 will work…
  • IRS VIDEO on Life Changes
  • Steve's Video on MAGI Income
• Lost your job? How to keep your Health Insurance. Shelter at Home VIDEO
• References & Links
  • Here's instructions, job aid, reporting change in income
    • Toolkits
  • Our webpage on the exact definition of MAGI Income
  • If you've appointed us - instructions - as your broker, no extra charge, we can do it for you.
  • Voter Registration
  • Denial of benefits and possible criminal charges if you don't report changes in income!
    • When Increasing Your Covered California Income Estimate Creates an Ethical Dilemma Insure Me Kevin.com
  • Fudging Income?
  • Western Poverty Law on reporting changes
  • How to cancel coverage.
• Visit our webpage on how to report changes
  • Covered CA's Webpage on Reporting Changes
  • Broker Toolkit
  • Legal Codes

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Calculate your Covered CA MAGI Income

take #Line8b 11 Adjusted Gross income then add line 2a, 6a & 8 (Foreign Income)

• 1040 IRS Annual Tax Form
  • Schedule 1 Additional Income & Adjustments to Lower your MAGI Income
    • IRA Retirement
    • Health Savings Account
  • Estimate next years MAGI Income?
    • Steve's Video on MAGI Income
  • Get instant quotes, subsidy calculation and coverages
  • NO ASSET TESTfor MAGI based subsidies in Covered CA or MAGI Medi Cal Qualification. VIDEO
    • Nor is there a lien against your estate for Covered CA or MAGI Medi Cal

How does your Income and Household Size get #verified?
Page 5.206 Western Poverty Law

• Your income and tax household size is checked with data sources using the federal verification hub. ^wikipedia *
• For Medi-Cal, if the income information submitted by the individual is “reasonably compatible” with the information obtained through the electronic data sources, e.g., IRS, state wage data, unemployment, Social Security, Medi-Cal accepts the amount listed on the application. The two amounts are “reasonably compatible” for Medi Cal in any of the following circ*mstances:
  • • Both show the individual’s income above the relevant income standard;
    • Both show the individual’s income is at or below the relevant income standard; or
    • The individual states their income is above the income standard and the information obtained by the state shows the individual’s income is at or below the relevant income standard. In this case, the individual must be told that the income information they provided was higher than the information the state obtained through electronic verification and the individual may request to have their income determined at the lower, verified amount.
• If the income information obtained through electronic verification is not reasonablycompatible with the information provided by the individual, the individual mustprovide additional information that explains the discrepancy, such as pay stubs orother documentation regarding income. ^{WIC 14013.3} *
• For Covered California, income information is checked against an applicant’s previous year’s tax return through the IRS database.
  • On the other hand It’s said Covered CA can’t see your tax return ^{Insured Me Kevin.com} * Your Tax Return Is Not Linked To Your Covered California Account
• If the applicant says that the income and tax household size on their last year’s tax return represents an accurate projection of their income and household size for the benefit year for which they are applying for coverage, Covered California uses that tax information.
  • Covered California accepts self-attestation of income and household size if tax data is unavailable or the applicant attests that a change in income or household size has occurred or is reasonably expected to occur such that the tax data is not accurate for this benefit year.
  • If, however, Covered California finds that the application’s attested income and household size are not reasonably compatible with other information from the applicant or information Covered California has other than the tax data, then the attestation will be verified against state electronic data sources. If state sources are unavailable, the applicant must submit documentation to support their attested income.
  • There is an alternative verification process for individuals who attest to projected household income. If their projected income is no more than 10% below the income on their most recent tax return, it must be accepted without further verification. If the projected annual income is more than 10% below the latest tax income or if the tax data is unavailable, the applicant’s attested income is verified with state data sources or by requesting documentation from the applicant.
  • When income cannot be verified electronically, Covered California notifies applicants of what information is needed and gives them 90 days to provide it.
    • If the applicant does not provide the information within 90 days, Covered California uses the information available through electronic databases to determine their eligibility. For MCAP, if income cannot be electronically verified, paper documentation is requested. ^{Page 5.206} *
• Learn more about Understanding Reasonable Opportunity Period (ROP) & Auto Discontinuance Toolkit

Federal IRS #Form8962 Instructions Premium Tax Credit

Reconciliation Form for Covered CA Subsidies attaches to 1040
Subsidy is IMHO hocus pocus - smoke & mirrors
it all comes out when you file taxes!

• Introduction

• If you got too high a subsidy or too low, it gets reconciled at tax time on form 8962. If your subsidies were too high you may have to pay the excess back and maybe penalties, if too low, you can get a tax refund or lower the amount you have to pay. In a lot of ways, IMHO subsidies are hocus pocus, jiggery pokery - smoke and mirrors as it's all guesswork and promises. Be sure to report income and household changes within 30 days.

  • Instructions for IRS Form #8962 Subsidy Reconcilation
    • How to fill out 8962 VIDEO etax.com
    • Get form 1095 & FTB 3895
      • Dispute 1095 Information?
      • Covered CA IRS 1095 Tool Kit
    • etax.com 8962
    • 8962 ONLINE Calculator Tax Form Calculator.com
    • Covered CA Tool to find your tax forms & file
  • ARPA & Inflation Reduction Act of 2022
    • Instead of increasing taxpayer audits, policymakers should simplify taxes across the board. That way, it would be easier for everyone to pay the correct amount to the government. ^{heritage.org/who-those-87000-new-irs-agents-would-audit}
    • That 87,000 new tax agents estimate represents everything from IT techs to customer service people who answer the phone and help you file your return. Second, it includes attrition. So, the actual enforcement personnel is 5,000 ^{LA Times} * ^{Mother Jones}
      • time.com/irs-87000-agents-factcheck-biden/
  • IRS backlog hits nearly 24 million returns, further imperiling the 2022 tax filing season
  • ARPA Stimulus - you don't have to pay back 2020 overage on subsidies ^IRS.Gov *
  • InsureMeKevin.com on subsidies & pay backs... 1.25.2022 update ARPA and 600% CA
• 1040 Instructions
• • IRS - Your Federal Income Tax - Publication # 17
  • VITA Volunteers to help you with Taxes?
• Overview FTB site
  • How to Reconcile Subsidies FTB
  • Calculate Pay Back
  • Assistance Repaying California Subsidies
    • covered ca.com/the most you might have to pay back
    • 2022 Insure Me Kevin.com

• Our webpage on Form 8962 - Premium Tax Credit Subsidy Reconciliation