I was on an ACA plan with advanced ACA premium tax credits, Jan through June, 2021. My wife was already on Medicare since 2020, so, two of us in the household. I went on Medicare July 1, and later on, decided to withdraw a lot from our IRA's and rebalance our assets in 2021. Since I knew I was going to have an income greater than 400% of the poverty level, and my insurance premiums weren't greater than 8.5% of the household income, I fully expected to repay the whole $5884 in advance credits for my ACA policy. To my surprise, when plugging in form 1095-A numbers exactly as shown, Turbotax is showing a $2700 repayment limitation on form 8962, line 28. Since I had paid what I thought I would owe in advance, now I receive a decent refund if Turbotax is correct.
There is no data source for their use of that number except the IRS instructions, which to me seems to indicate that anyone over 400% and paying less than 8.5% for their policy would have to repay their premium tax credits fully. What am I missing in my thinking? Some sort of forgiveness for being on a policy for half the year?
