Notice CP11 for TY 2021 stating I owe 6491.70

[cdibuff]

Basically the form says that I owe updated amount of 5,892 plus penalties and interest. This amount is the difference of the maximum annual premium tax credit (25,530) and what I received (7,369) minus what I prepaid in taxes.

I looked through my turbotax home and business 2021 desktop edition worksheets.

My household income on the 8962 worksheet  line 3 is 136,371 

Oddly though, line 5 shows the "household income as a percentage of federal poverty line" to be 133%

Is this a turbotax mistake? This has resulted in me being assessed taxes, penalties and interest.

What are my next steps to get this looked over by turbotax and me being refunded the penalties and interest?

[rjs]

It's not a TurboTax mistake. You answered Yes to the question that asked whether you or your spouse received or were approved to receive unemployment compensation in 2021. The box on line A at the top of Form 8962 should be checked. That automatically makes Form 8962 line 5 a fixed value of 133%. It is not calculated from lines 3 and 4. The 133% cutoff is a provision of the American Rescue Plan Act for 2021 only.

The 2021 IRS Instructions for Form 8962 say the following at the top of page 8.

"If you, or your spouse (if filing a joint return), received, or were approved to receive, unemployment compensation for any week beginning in 2021, enter 133 on line 5."

[cdibuff]

OK Thanks for the clarification. Then it seems like the entire premium tax credit should be awarded? Therefore it is IRS's mistake? Do you have any ideas on how to go about this? It is nearly impossible to call IRS.

[rjs]

Read the entire IRS notice carefully and follow the instructions in the notice for what to do if you disagree with it. Be sure to respond by the deadline in the notice. You might be able to reach someone at the IRS by calling the contact number in the notice rather than the general number.

If you purchased Audit Defense for your 2021 tax return, call TaxAudit at 877-829-9695, or report your IRS letter on the TaxAudit.com web site. Do not contact the IRS until you have spoken to TaxAudit. They might contact the IRS on your behalf.

If you did not purchase Audit Defense, you can get help with your IRS letter from TurboTax by calling 800-624-9066. See the following FAQ.

TurboTax Audit Support

Also see the following link on the IRS web site for more information.

Understanding your CP11 Notice