In the new stimulus bill likely to go through congress within the next two days, there is a provision that will affect my wife and me, namely that the first $10200 of unemployment assistance in 2020 that an individual receives will not be subject to taxation.
Both my wife and I were made unemployed during the pandemic and claimed around $12000 of unemployment insurance each before we got new jobs. I understand that now we'll receive relief on the first $10200 of that (presumably each) but I have a second conflicting issue to do with the Advanced Premium Tax Credit we were receiving for our healthcare.
Due to the unexpectedly large amount of Pandemic Unemployment relief we got, our income broke the 400% poverty line by the end of the year and in my current calculations on TurboTax, that means we owe a huge amount of money as we're required to pay all of our health insurance advance premium tax credit money back. This credit had been calculated on our assumption we would be making less money than we ultimately received due to the extra unemployment relief.
My question is whether this tax relief on the unemployment benefits will reduce our repayment of the advanced premium tax credit by making us eligible for more of it. The amount of APTC we are required to return frankly dwarfs the amount of tax relief we'll get from paying less taxes on our unemployment, not that it won't be a great relief anyway.
Thanks for any insight, help, or guidance.
