We have further investigated this situation in the meantime. I apologize for the delay in responding.
If you receive a code FF on your W-2 for an employer reimbursement of medical expenses through a QSEHRA, you need to calculate if you were still eligible for any APTC (Advanced Premium Tax Credit). You can calculate this amount using the worksheets in Internal Revenue Service Publication 974. See also the IRS Instructions for Form 8962 for more details.
You will need to file by mail in this situation, because the IRS will look for "QSEHRA" written on the Form 8962, and an explanation letter attached to the return.
The TurboTax program does not support the calculation of the premium tax credit if a reimbursement was received via a Health Reimbursement Agreement (HRA) by the taxpayer or a member of their family. It also does not support the use case where they did not participate in the HRA, but the HRA is considered affordable. This is covered in the document, Unsupported Calculations.
If you are provided a QSEHRA, and it is considered affordable coverage for a month, no PTC is allowed for that month. If the QSEHRA is not considered affordable coverage for 1 or more months, you may still be eligible for the PTC. If you are eligible for the PTC for any month for which you are provided a QSEHRA, you must reduce your PTC (but not below -0-) for that month by the monthly QSEHRA permitted benefit amount. The monthly permitted benefit amount is the maximum QSEHRA benefit amount an eligible employee is allowed per month.
Use Worksheet N to determine whether your QSEHRA is considered affordable coverage for the months of the year that you were provided the QSEHRA. You will need the notice provided by your employer and the permitted benefit for self-only coverage to complete Worksheet N.
Your employer should have reported your annual permitted benefit (self-only or family amount, as applicable) in box 12 of your Form W-2 with code FF. Your permitted benefit amount, as reported to you by your employer on Form W-2, is used to calculate the amount by which you must reduce your PTC, if you are otherwise eligible for the PTC. Use Worksheet Q to figure your monthly PTC for months in which you were provided a QSEHRA.
If you enter amounts in TurboTax based on the calculation worksheets in Publication 974, and TurboTax calculates a Premium Tax Credit when your calculations don't, as stated earlier, you can file by mail, remove any incorrect TurboTax calculation from your return, and attach your worksheets.
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