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Level 2

Question

Expected timing of the software update for elimination of APTC repayment for 2020

Forum|Forum|5 years ago
March 26, 2021
7 replies
117 views

Help re: the timing of the software update for the APTC repayment for 2020.

I had about $10k in APTC for 2020 (line 29 of form 8962).

Last week the TT software (rightly) suggested holding off on filing my federal taxes until TT could update the software to incorporate the elimination of the requirement to repay the APTC. I downloaded an update this afternoon and looked to see if the update was incorporated. There was no change to form 8962 or my numbers; however, there was also no notice to hold off on filing my federal return.

Does anyone know when TT will have the software updated? I've seen a reference for an option to sign up for an email when this update is implemented, but don't know where to go. If anyone can point me in the right direction, that would be most appreciated.

TurboTax Home & Biz Windows

BillM223

Level 15

It is not possible to make instant updates to tax software just because Congress has passed this or that law. This is for a variety of reasons:

The first reason is that we have to wait for guidance from the IRS on how the IRS is going to implement these changes.

For example, the law says that the repayment of excess Premium Tax Credit is waived for 2020. You might think that this is clear, but what about the collateral issues?

Self-employed taxpayers who have to repay excess PTC can apply that to the Self-employed Health insurance deduction. Will that still be true when the taxpayer doesn't have to repay the excess PTC? Congress didn't say so the IRS has to decide. Furthermore, the Self-employed health insurance deduction and the Self-employed SEP, SIMPLE, and qualified plans deduction have peculiar interactions where the value of one affects the other. Will this change? Again, Congress does not say so the IRS has to consider all the possibilities and issued rules on how we are to proceed.

The IRS has also said that they are considering automatically calculating the difference in tax for taxpayers who have receive unemployment compensation and sending out refund checks, and have implied that they might do the same for the excess PTC issue. So they have asked taxpayers to wait and not amend their returns until the IRS decides what it is going to do.

This, too, will affect TurboTax's response: to amend or not to amend?

Even when TurboTax receives the guidance that hasn't come yet, there is still work to do.

TurboTax has to read and understand the guidance and design a response.
TurboTax has to code the underlying code
TurboTax has to design and create the screen for the interviews
TurboTax has to design the changes to PDF forms (if any) and to the XML forms that are e-filed
These changes have to be approved by the IRS
TurboTax has to create test cases to test the changes
TurboTax has to create regression tests to make sure that the changes did not break something else
TurboTax has to create documentation for internal and external audiences
TurboTax has to package the changes so that they can be rolled out to Online servers and to CD/download software users

In short, you and we will have to wait until the IRS issues guidance on how these tax law changes are meant to be interpreted and implemented - and this will take time.

Normally, tax laws changes are finished before December 31st, but this has been a year of "moving the goalposts" on practically a daily basis. It is very difficult to plan anything when the Congress, the IRS, or the states change the rules on the fly.

Give the process a chance - when TurboTax knows something, then you will know something shortly thereafter as TurboTax works through the steps I listed above.

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mrpooh

Level 3

Might you have any clues or suggestions as to whether one might wait until the new filing deadline of May 17 2021 to see if Form 8962 has been adjusted to reflect a new policy (and TurboTax adjusting their calculations accordingly), or just pull the trigger and file the return now, and "trust" that if a refund of the excess advance premium tax credit repayment on Line 29 of Form 8962 is owed back, it will be issued in some way, at some point in the future?

Subsidyhit

Level 3

@ddhub thank you for posting this regarding elimination of APTC repayment.

I wrongly assumed the TurboTax update on 3/26 included both Unemployment Update & APTC Update based on the fact that after I tapped on REVIEW Tab, TurboTax stated "We've already updated your federal return to include the new tax relief...." and no further mention of advance premium tax credit as indicated in the previous REVIEW Tab result message. I have posted both REVIEW Tab messages from TurboTax below for your review.

TURBOTAX GET YOUR ACT TOGETHER HERE and post the proper REVIEW Tab message !!

HERE IS THE REVIEW MESSAGE AFTER THE 3/26 UPDATE

HERE IS THE REVIEW MESSAGE BEFORE THE 3/26 UPDATE...........

ddhubAuthor

Level 2

@Subsidyhit - thanks for posting a picture of the original warning from TT to not file your taxes until the proper update for the APTC has been completed. Based on the input from @BillM223 (Employee Tax Expert) this may take a long time to get resolved (between the IRS providing guidance and then for TT and other software providers to make the appropriate updates). If this doesn't occur before the new federal tax deadline I'll have to file an extension. What would be most helpful is for TT to send an alert when this update is completed. I saw an earlier reference for TT users to sign up for email updates - do you (or anyone reading this) know where I can sign up? Thanks!

Sgweiss

Level 2

Drake Software has this:

17177: Form 8962 - Advanced Premium Tax Credit Repayment (ARPA)

Last Week 1040 Individual Data Entry

“Form 8962 - Advanced Premium Tax Credit Repayment not required under the American Rescue Plan Act.

As of April 3, 2021, EF message 2613 has been removed and returns with excess Advanced Premium Tax Credit (APTC) can now be filed.

The American Rescue Plan Act of 2021 (ARPA), passed in March 2021, contains a provision to no longer require repayment of any excess APTC on 2020 tax returns. Recent IRS guidance relative to this provision instructs taxpayers who have an amount on line 29 of Form 8962 to not include Form 8962 with their return. “

the unemployment provision got updated immediately - how hard is it to turn off the form so we can file our taxes?

BillM223

Level 15

Unfortunately, because the IRS has not released the guidance, TurboTax cannot schedule the work and testing that needs to be done. I would be delighted to give you a link where you could be notified of released updates, but until the IRS can give us a complete picture of the whole elephant and not just this part or that, no scheduling of work and testing can be done.

The issue is far larger than just deleting the 8962.

And you forgot to include the rest of the quote:

"the IRS intends to make internal changes that will prevent these taxpayers from receiving correspondence regarding Form 8962 not being filed."

The present IRS practice is to Accept returns with a 8962 (i.e., all returns), then about three weeks after Acceptance, to place the return that should have had an 8962 into a holding queue and to write the taxpayer a letter asking for the 8962, which holds up processing and any refund. Last year, any taxpayer who should have filed an 8962 but didn't had their refunds held up for months.

So if the IRS has not updated its internal procedures - and software - by the time that a return hits the queue, it will be held up for manual processing which is very likely a worse result than just waiting a bit to file - especially since the IRS has delayed the filing date IN PART FOR EXACTLY THIS REASON to May 17th (June 15th in Texas, Louisiana, and Oklahoma).

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Sgweiss

Level 2

Thanks for helping us but I’ve read the language in the bill and every interpretation of it. I don’t understand what the issues are or why the irs needs to issue guidance.

lordmuggins

Level 2

I have the same issue - but I'm stuck as my State return is due already; my State does not have an extension. Very frustrating, as I feel like I have paid for Turbotax, spent hours on it, and the result is that I cannot actually use it to file my taxes.

For the record, I have no APTC repayments due.

I am thinking of requesting a Fed and State extension, but paying now what TT says I will owe for both - to hopefully avoid penalties.

DawnC

Level 15

That could be the issue. Try to following and then attempt to e-file again. @3946683

You can enter the 1095-A as is, but don't link it to your business Schedule C and then manually enter the correct amount you paid as a Schedule C self-health insurance premium expense. If you don't link it to your business, the medical premium deduction will go to Schedule A instead of Schedule 1. See the Medical Expenses worksheet, Line 2b and enter a reimbursement of that amount (as a positive #) on Line 13a of the same worksheet to remove the personal deduction on Schedule A.

If entered in the Schedule C section, the expense will go to Line 16 of Schedule 1.

What state are you filing @lordmuggins? I can post some extension and payment information if you need it. For IRS payments, use this link.

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Anonymous

@DawnC I tried your workaround, but it didn't work. I completed each of the steps as you instructed, but perhaps because I did so on my amended return, TurboTax gave me a warning not to start over with my amended return until the IRS accepted my already e-filed amended return. Consequently, the tax refund amount that appeared was also significantly incorrect, showing a balance due greater than my expected refund, basically omitting my excess advance premium tax credit from my original return that was e-filed in Feb, long before the UCE guidance was incorporated into TT software.

Is the problem of the waived repayment not reducing the SE health deduction going to be fixed soon? I installed today's update, but this issue still is not resolved.

tyork123

Level 2

It looks to me that Turbotax is not calculating the Premium Tax CREDIT either. Form 8962 line 26 is blank even if the the eligible credit is greater than the advance payments made.

I see most users are having trouble when repayment was being calculated but calculations are incorrect when the credit is due as well.

When will this be fixed?

Beroli

Level 2

I am also confused by how TurboTax implemented the Relief Act change of not requiring repayment of APTC (Advanced Premium Tax Credit) for 2020. The update is counting any overpayment of APTC as reimbursed medical expense on line 2b of the Medical Expenses Worksheet which ends up with a lower amount of medical expense on Schedule A Line 1 by the amount of the excess APTC.

While this does appear to comply with the instructions for Schedule A (Pub 502 - "You can't include in medical expenses the amount of health insurance premiums paid by or through the premium tax credit. You also can't include in medical expenses any amount of advance payments of the premium tax credit made that you did not have to pay back."), it does not seem consistent with the IRS decree referenced above which says that if someone has already filed a return before this decree on APTC that the IRS will remove any amount from 1040 Schedule 2, Line 2 ("The IRS will reduce the excess advance Premium Tax Credit repayment amount the taxpayer reported on their 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, and Line 29 of Form 8962 to zero and process their return. There is no need to contact the IRS. If a taxpayer receives a IRS letter about excess APTC for tax year 2020, they should disregard the letter.") It mentions nothing about them adjusting Schedule A.

Based on my reading of these various components, it looks like I would have been better off filing my return before any of these updates were made by TurboTax and then waiting for the IRS to send me a check for my overpayment of APTC.

I know that this has been a difficult year due to the last minute and retroactive tax code changes, but honestly, I am about ready to give up.

FD13

Level 2

From another thread below:

As mentioned in the last Post and my direct experience as of 6pm today....with the 04/15/2021 Update my Federal Taxes have changed by $100+. So, some calculations have changed as of today. What changed?

Again TurboTax Experts, we all need to understand:

1) What is going on in general with release timing and the Bugs & changes to be fixed on each date?

2) What was updated on 04/15/2021?

3) When we can expect a successful filing with all changes and bugs fixed?

4) Do the TurboTax Experts have access to the developers and designers or are you just giving us intelligent estimates of what might happen?

Please do some research before responding and Thank You for your efforts in these Trying times.

arifry

Level 2

I accidentally had my daughter (who is not a dependent) on my Covered California account from January-May while she had separate coverage from her employer. So I received additional premium tax credits for her for those 5 months that I am now on the hook to repay.

Does anyone know if under this new elimination of APTC repayment, I would qualify? Or is it just for people who had a change in income level?

Thank you!