Covered California income rules can become hard pill to swallow when tax bill comes due

EVERY TAX SEASON hundreds of thousands of Californians are hit with an unexpected bill: They owe hundreds of dollars or more to the IRS because they accepted more money in subsidies for health insurance than they were allowed.

The chargeback can sting. Collectively, 415,000 California households owed the IRS close to $690 million in 2021 in charges related to the health care subsidies, according to agency data from the most recent year available. That is roughly $1,662 per person or family. Many people who end up owing money live in lower-income households.