" after filing his 2018 return, he has received IRS LTR 12C requesting him to complete and submit Form 8962 and a copy of his Form 1095-A."
Follow the instructions in that letter to absolute perfection. No more. No less. For example, the letter does not instruct your son to file an amended return. Therefore, do not, under any circumstances file an amended return. Send the IRS *EXACTLY* what they are asking for. Take special note that he has 20 days to respond to the letter. First, the 8962 needs to be generated.
Start by making a backup copy of the return in both PDF format and the .tax2018 file exactly as it was when it was submited and accepted by the IRS originally. If you used the online version then download the .tax2018 and PDF files to your computer. If you used the CD version of the program, the original files are in the documents/turbotax directory. Just back them up to a USB thumb drive or something.
Now open the tax return for editing. DO NOT click the AMEND button. Go to the health insurance tab.
- Select to pick which months he had coverage from ANY provider (marketplace or other) and continue.
- On the tax penalty waiver screen leave everything blank and continue.
- You should be on the "your penalty is waived" screen. Select continue.
- For "were you enrolled in any of these less common plans?" select yes and continue.
- Select Obamacare Plan (1095-A) and continue.
- Select yes and continue
- Select "shared this policy with another taxpayer who is not on my taxes" and continue.
- Enter the SSN of the taxpayer who owns the policy as shown on the 1095-A.
- Start month is September, and the end month is December.
- Now go by the number of people shown on the 1095-A as covered individuals, including the owner/taxpayer of the policy. If there are a total of four people covered on the 1095-A then all three percentages are 25%. If a total of five people are shown as covered on the 1095-A, then all three percentages are 20%. (I'm not clear the number of people actually listed on the 1095-A)
- Click the Continue button two times.
Now you see if your son has to pay back any of the PTC. If the amount to be paid back is smaller than the "ORIGINAL" amount expected to be refunded to him, then that's fine. The IRS will just reduce his refund accordingly. If the amount to be paid back will exceed his refund, then he won't be getting a refund and will need to pay the difference to the IRS ASAP to stop the accumulation of interest and late fees.
If he will owe the IRS, the best bet is to pay immediately at http://www.irs.gov/payments.
Just keep clicking the continue button until you get to the "Other Tax Situations" screen, and that does it.
Now go to the FILE tab and under that select the sub-tab for "Print/Save for your Records" and under that select the PRINT button.
Select Specific Forms, and then Form Only.
On the right scroll down to find and select Form 8962: Premium Tax Credit
Click the Preview Print Copy and this will open that form as a PDF document. (It takes a bit, so be patient.)
Now print the form displayed on your screen. It's two pages.
From this point, follow the instructions in the LTR12C *to* *absolute* *perfection* to send the 8962 and a copy of the 1095-A to the IRS.
Now I want you to take note that the return as originally filed has now been changed. When the IRS gets the documents they requested, they will make the same exact changes to their copy of the already filed and accepted return. So in the end, what you have and what the IRS has will match. So that's why you do not, under any circumstances AMEND the return since the LTR 12C did not specifically and explicitly tell you to do so.
