Why does the program automatically assume my son was unemployed at some point during 2020. I never indicated he was. He had Marketplace ins for 3 1/2 months.

Forum|Forum|5 years ago
March 22, 2021
1 reply
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My son qualified for Marketplace ins at the beginning of 2020. His employer did not offer ins. so he got Marketplace ins. He then found a new job in April with a company that has ins benefits and more pay so he cancelled marketplace ins. Why is the Turbo Tax program automatically assuming my son was unemployed. That was never the case. Also, he is having to pay back over $700 in premium credits that he received during the time he had the job with the lower income.

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BillM223

Level 15

"Why does the program automatically assume my son was unemployed at some point during 2020."

Where is TurboTax doing this? Remember the we in the Community cannot see your private tax data.

"Also, he is having to pay back over $700 in premium credits that he received during the time he had the job with the lower income."

Yes, it is quite surprising to most taxpayers that the calculation of how much Premium Tax Credit you are due or have to pay back is based on your annual income, not on the income during the months when you were covered by a Marketplace policy.

This, in essence seems to penalized taxpayers who, like your son, got a better paying job.

But this is the way the US Tax Code is written; I encourage you to contact your Congressional representative, because they are the ones who write the US Tax Code.

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geauxjamie-gmailAuthor

Level 2

"At the very end of preparing state tax and reviewing, I get this:

You qualitfy for new tax benefits

You get additional tax relief as part of the American Rescue Plan because you told us you received unemployment or took an advance premium tax credit.

Here are your options:

Wait to file while we work to include these federal and state benefits on your return. We'll save your return and notify you by email once everything's ready.

Or file now and wait for an update from the IRS on how to claim your additional benefits."

The only thing I can come up with is the program is assuming my son collected unemployment because he had insurance through the marketplace for 3 1/2 months. Nowhere in the program does it ask me if he was unemployed. What am I not understanding? Thanks so much for helping!

BillM223

Level 15

"because you told us you received unemployment OR took an advance premium tax credit."

You saw this message because your son got the Premium Tax Credit during the year, not because he was unemployed.

The tax benefit is that Congress has passed a bill that would eliminate having to repay the excess Premium Tax Credit.

However, the IRS has not yet published guidance for how we are to program this, so, for now, we encourage you to

"(1) Wait to file while we work to include these federal and state benefits on your return. We'll save your return and notify you by email once everything's ready.

(2) Or file now and wait for an update from the IRS on how to claim your additional benefits."

The IRS is talking about automatically refunding these excess Premium Tax Credits, but this impacts other parts of the return, which is why we are waiting for the IRS to decide what it is going to do.

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