I don't think there's anything weird going on, it's just the combined effect of paying taxes on the additional amount withdrawn, and the reduced ACA subsidy. For your situation, an additional $2500 from your tIRA, raising your income from $30000 to $32500, means you'll give up $280 in ACA subsidy and then pay $300 more income tax depending on your specifics. Not a big deal.One more question as I've been thinking about this scenario ... why is this issue not addressed elsewhere? When I Googled - tax implications of tIRA withdrawal on ACA subsidy - I find nothing other than the articles with screenshots that FiveK referred me to. I read a lengthy article on Investopedia about ACA and taxes - no mention of this issue. It just seems strange. Here's a link to the Investopedia article:
https://www.investopedia.com/articles/p ... re-act.asp
It references a Net Investment Income Tax but for single tax filers (my situation) the threshold is $200,000.
Statistics: Posted by PFM — Sat Jul 27, 2024 2:23 pm — Replies 31 — Views 3171