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Level 2

Repayment of Advanced Premium Tax Credit

We had a surprise K1 and some investment dividends that drove us over the limit for the APTC in 2018.  We must now repay the entire amount.  The amount is substantial - $31,648.  Health Marketplace premiums for folks nearing retirement are significant in our part of the state. 

 

It is my understanding that repayment of the APTC can be deducted in the year it was received, since without the APTC we would have payed the entire premium amount ($42,432).

 

Being self-employed, can the repayment amount be specifically noted as such, then added as a business health insurance expense?  That would take the APTC repayment (and premiums we actually paid) to line 29 of the 1040, significantly reducing our income and therefore tax burden.

 

Are there other ways to handle this situation in turbo?

9 Comments
Employee Tax Expert

Repayment of Advanced Premium Tax Credit

Yes, you can apply the APTC repayments to self-employed healthcare.When you enter your 1095-A, check  Self-employed and bought a Marketplace plan on the screen that says Do any of these situations apply? If you've already entered your 1095-A, go back and click edit, and you will see that screen as you continue.

Level 5

Repayment of Advanced Premium Tax Credit

IsabellaG: I have the same 2018 repayment issue.  I have checked the box "Self-employed and bought a Marketplace Plan".  TurboTax shows the repayment amount on Schedule 2 and Form 1040, line 11.  However, Schedule 1, line 29 only shows the premiums I paid directly and does not include the repayment amount.  The repayment amount appears on Schedule A, line 1 Medical -- which I believe is not correct.  Assuming I'm correct, do you know if TT is aware of this error?  Alternatively, can you advise who I should contact at TT to have this issue addressed?

P.S. Last tax year, I had the same issue but TT correctly included the repayment on line 29 of old Form 1040.

Level 2

Repayment of Advanced Premium Tax Credit

IsabellaG,

 

Thank you for your response.

 

I went back and edited the 1095-A as you suggested.  Turbo asks which business is associated and what months it operated.  I entered the appropriate information.  It seems to think about it a bit... but still places the APTC repayment amount on Schedule A line 1.

 

Line 29 remains the same.  The calculation for that amount is noted in text at the bottom of the Health LTC Wks.

 

As an Itemized Medical Deduction, the repayment is reduced by Line 3 of Schedule A, leaving us with a significant amount of Federal Tax due.  Other suggestions?

 

Thanks!  

Employee Tax Expert

Repayment of Advanced Premium Tax Credit

You may have to first delete the original 1095-A that you entered, and re-enter it from scratch. I entered a 1095-A that resulted in a recapture of the Advanced Premium Credit that I linked to a Schedule C Business, and I was correctly given the Self-Employed Health Insurance deduction on line 29 of Schedule 1 of my 1040. I tried this in both the online and desktop versions of TurboTax and it worked correctly. Sometimes your initial entries need to be deleted before you can make a change. See this link for finding and deleting forms in TurboTax.

Level 5

Repayment of Advanced Premium Tax Credit

Hi Isabella - thank you for the prompt reply! 

I deleted and re-entered my 1095-A, but the result is the same: the repayment amount is not reflected on Schedule 1, but is a Schedule A deduction.

Is there a way to alert TurboTax that this is an issue that needs to be fixed?

Regards,

Paul

Level 2

Repayment of Advanced Premium Tax Credit

Deleted the 1095-A and re-entered it.  Linked it to the business, but Line 29 is the same as it has been.  The entire APTC repayment  amount gets noted of Form 8962, on Schedule 2 and gets put on Schedule A as an Itemized Deduction.

 

I have been getting a deduction on Line 29.  It appears to be just slightly more than the premiums I actually paid.

 

Let me ask this.... how is line 29 actually calculated?  All I see is a note at the bottom of a sheet that says something like "a deduction has been entered, but does not show up on this worksheet".  Maybe my expectations are too high.  If the APTC repayment is significant, does that translate to a significant change to Line 29..... or would it be a few dollars more than the actual premiums paid?

 

Thanks!

 

 

 

 

Employee Tax Expert

Repayment of Advanced Premium Tax Credit

I have since gone back and entered a1099-A without checking the box for Self-Employed, and then changed it to Self-Employed, and I'm not experiencing the same thing that you are. I am using TurboTax Self-Employed online, and TurboTax Home & Business for Windows. If you've deleted the 1095-A ( use the trash can icon shown below) and you are still not getting the expected change, I'd advise you to contact us by phone to see what's going on with your return. 

 

 

 

Level 5

Repayment of Advanced Premium Tax Credit

Can you double check the contact link:  contact us by phone 

I get an error message: "This site can't be reached"

Employee Tax Expert

Repayment of Advanced Premium Tax Credit

I am sorry that link didn't work. Instead, log in to your account, and at the top of your screen choose Help. Then scroll to the bottom of the screen and click the Contact Us button. Then click Get The Number, and enter your information.