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Level 2

Repayment of Advanced Premium Tax Credit

We had a surprise K1 and some investment dividends that drove us over the limit for the APTC in 2018.  We must now repay the entire amount.  The amount is substantial - $31,648.  Health Marketplace premiums for folks nearing retirement are significant in our part of the state. 

 

It is my understanding that repayment of the APTC can be deducted in the year it was received, since without the APTC we would have payed the entire premium amount ($42,432).

 

Being self-employed, can the repayment amount be specifically noted as such, then added as a business health insurance expense?  That would take the APTC repayment (and premiums we actually paid) to line 29 of the 1040, significantly reducing our income and therefore tax burden.

 

Are there other ways to handle this situation in turbo?

3 Comments
Employee Tax Expert

Repayment of Advanced Premium Tax Credit

Yes, you can apply the APTC repayments to self-employed healthcare.When you enter your 1095-A, check  Self-employed and bought a Marketplace plan on the screen that says Do any of these situations apply? If you've already entered your 1095-A, go back and click edit, and you will see that screen as you continue.

Level 4

Repayment of Advanced Premium Tax Credit

IsabellaG: I have the same 2018 repayment issue.  I have checked the box "Self-employed and bought a Marketplace Plan".  TurboTax shows the repayment amount on Schedule 2 and Form 1040, line 11.  However, Schedule 1, line 29 only shows the premiums I paid directly and does not include the repayment amount.  The repayment amount appears on Schedule A, line 1 Medical -- which I believe is not correct.  Assuming I'm correct, do you know if TT is aware of this error?  Alternatively, can you advise who I should contact at TT to have this issue addressed?

P.S. Last tax year, I had the same issue but TT correctly included the repayment on line 29 of old Form 1040.

Level 2

Repayment of Advanced Premium Tax Credit

IsabellaG,

 

Thank you for your response.

 

I went back and edited the 1095-A as you suggested.  Turbo asks which business is associated and what months it operated.  I entered the appropriate information.  It seems to think about it a bit... but still places the APTC repayment amount on Schedule A line 1.

 

Line 29 remains the same.  The calculation for that amount is noted in text at the bottom of the Health LTC Wks.

 

As an Itemized Medical Deduction, the repayment is reduced by Line 3 of Schedule A, leaving us with a significant amount of Federal Tax due.  Other suggestions?

 

Thanks!