It may be a moot point if you chose to take the Premium Tax Credit in the form of monthly subsidies (Advanced Premium Tax Credits), however, it is not moot if you chose to pay full monthly premiums and entire take the credit at the end of the year when you filed taxes.
I filed my taxes with the TT Premium edition on 3/2 with $14600 refund including a refund of $11,300 for the Premium Tax Credit. I log in to TT 3/25, and it appears that Turbo Tax retroactively reduced my refund to $3300 and the Premium Tax Credit has been removed. After doing some digging, it appears that the unemployment tax 'break' was recalculated into my return by Turbo Tax without me knowing and the $10200 Unemployment waiver took our income below the threshold for the Premium Tax Credit. Obviously, the intent of the Unemployment waiver provision was not to make ineligible those that were already eligible for the Premium Tax Credit. This affects a very small population of taxpayers (had unemployment income, income was within $10200 of the FPL, and those taxpayers had chosen to pay their full monthly premiums and take the PTC at the end of the year instead of receiving monthly subsidies). In my case, the retroactive Unemployment waiver reduced my MAGI below 100% FPL which reduced my refund and removed my PTC in Turbo Tax. This was certainly not the intent of the provision. Rather, it was intended to provide larger refunds for the unemployed taxpayer. I contacted the IRS and the guidance that they provided was that the $10200 unemployment tax break was not a mandatory deduction, i.e., if it doesn't help you, you are not required to include it. The provision uses language like "you may", "you are allowed" "you can" instead of "you are required' to take the unemployment tax break/deduction. Problem is, Turbo Tax is automatically including it for everyone who qualifies for it, regardless of if it helps or hurts your tax refund and the system does not have an option to not take the deduction. If you want to exclude the unemployment deduction, you are being forced to file a paper return so that it is not automatically included with Turbo Tax.
