There is no penalty for incorrectly estimating your income. The health insurance marketplace knows that estimating income is difficult for many folks uncertain about what 2024 will bring. Fortunately, they have a process that balances any differences!
When you file your 2024 taxes in April 2025, the IRS will compare your final income for 2024 to what you reported on your health application and reconcile any differences.
When you go to file:
- If you UNDERESTIMATE your income on your application – If you end up making more than your original estimate, the IRS will take any overpaid tax credits out of your tax return. You may end up owing the IRS for any overpaid tax credits.
- If you OVERESTIMATE your income on your application – If you end up making less than you estimated, the IRS will pay you any owed tax credits that you actually qualified for.
We often advise folks to estimate on the higher end to avoid owing any tax credit back at the end of the year, but it's up to you!
The good news is that you can adjust your income estimation at any point in the year by contacting Stride! Any tax credit you're receiving will adjust for the following month and you'll have fewer issues at tax time.