2020 ACA Subsidy Penalty Waiver - Recovery Act

[slp_921]

Have you updated the 2020 software to waive the 400%+ subsidy for the ACA under the American Recovery Act?

I have to amend and need to be sure this is updated on 8962.

[KathrynG3]

Do not file an amended return to receive the 2020 ACA Subsidy Penalty Waiver - Recovery Act. 

The IRS clearly states at Premium Tax Credit: Claiming the Credit and Reconciling Advance Credit Payments:

We’re reviewing the tax provisions of the American Rescue Plan Act of 2021, signed into law on March 11, 2021.

Taxpayers who filed a 2020 tax return and reported an excess advance premium tax credit repayment on Line 29 of Form 8962, Premium Tax Credit, should not file an amended tax return only to get a refund of this amount. The IRS will provide more details soon. For the latest updates, check IRS.gov/coronavirus.

[slp_921]

No - I have to amend to correct filing status. 

[PattiF]

As Kathryn mentioned above, the IRS states that you should not file an amended tax return only to get a refund of the Premium Tax Credit. They will release the information about how they will be taking care of the change in the ACA Subsidy Penalty. You should wait until a statement is released with the latest information. And as listed above, here is the link that will be updated with the latest information. With all of the changes in the tax law, much patience is needed.

[slp_921]

It is not for the 8962. I have to fix my filing status which has interfered with my ability to get my covid related rebates.

[DawnC]

Here are the amending instructions.   Possible reasons to amend include:

• You need to change your filing status (for example, you want to change from Single to Head of Household).

The IRS allows you to change your filing status for a tax return you’ve already filed if no more than three years have passed since the original tax filing deadline. For example, if you filed as a single taxpayer last year, but now realize you qualified for head of household, you need to make the change on an IRS Form 1040X.

When you change this status, you not only obtain a larger standard deduction, but your income for that year is subject to lower tax rates. Making this change will likely result in a tax refund, but you cannot receive it until you file the amended return.

You can amend a return to change from married filing separate to married filing joint but not from married filing joint to married filing separate unless you do so prior to the original filing deadline without extensions. So, once you file a joint return you can not change it to a separate return if the filing deadline has already passed.

[slp_921]

Thanks the current is "Single" it should have been "Head of Household"

[eisner0533]

I have updated my TT software and still have a $2700 penalty for subsidy overpayment with the ACA. What am I doing wrong? I am in NC.

[slp_921]

Why can't we file 1040X for changing Filing Status and adding missing form 8962.  Also, the software still taking penalty as of today's update.

[BillM223]

"What am I doing wrong? "

You are not doing anything wrong - the code change to make the excess PTC has not been made available yet.

Why? Because TurboTax (and presumably other vendors) are awaiting for  guidance from the IRS on all the "what-if" cases that this law change has caused. For example, in the current product, any excess PTC that is charged to the taxpayer is transferred automatically to the Self-employed health insurance deduction - will that still be true when the  excess PTC does not have to be paid back any longer?

And this creates a number of issues with state returns that have different deductions that the federal.

So, while it's hard, please have some patience. As soon as we know what the IRS wants us to do with this, we will start to implement it and test it and roll it out in a responsible timeframe.