APTC reconciliation

[piersons]

Need some assistance with how to reconcile the APTCs my son received for medical insurance purchased on the exchange. 

Some background: In December 2021 my nondependent son (with no spouse or kids) had a part time job that did not offer medical benefits and he purchased health insurance thru the exchange and took advantage of the APTCs offered based on his income at that time.  In March 2022 he got a new job that offered medical benefits (that would be active in May 2022 after a short wait period) that met the minimum essential coverage (MEC) requirements and was at an incremental cost to him but affordable.  His new job and income was reported to the exchange but, due to what is probably best explained as a communication gap with the exchange representative he talked to, the fact that he was offered/eligible for affordable MEC thru his new job did not get reflected in his (now revised) application.  Additionally, he elected to stay with the insurance plan offered thru the exchange and he continued to receive the APTCs, albeit at a lesser amount because of his increased income provided by the new job.  In October 2022 it was brought to my attention that if someone is offered/eligible for affordable MEC medical insurance thru a job the person can continue to obtain insurance thru the exchange but if they do so they are no longer eligible for APTCs/PTCs for the applicable months. As such, in October 2022 the exchange was notified that he was offered/eligible for affordable MEC thru his job as of May 2022 and the APTCs were eliminated for Nov and Dec 2022.  He has received a 1095A and a 1095C, with the 1095A reflecting a higher APTC amount for Jan thru April, a lessor amount in May thru Oct and none for Nov and Dec.  The 1095C reflects the medical insurance offered by the company for May thru Dec 2022 with line 14 code of 1E and line 16 code of 2H for May thru Dec 2022.

The way I read IRS publication 974 and instructions for form 8962 he needs to repay the APTCs/PTCs received for May thru Oct 2022, since he was offered/eligible for, although did not take, affordable MEC insurance offered thru his job.  However, this situation is not reflected in the TT (deluxe) walk thru and I am at a loss as to how to proceed.

So 2 questions: 1) Do in fact the APCTs/PTCs he received for May thru Oct need to be repaid in full ? and, if so, 2) how do I reflect this in his tax filing via TT without affecting the PTCs for Jan thru April?             

[CatinaT1]

If you had coverage through the Marketplace, you are required to reconcile advance payments of the premium tax credit. 

Reporting changes in circumstances promptly will allow the Marketplace to adjust your APTC to reflect the PTC you are estimated to be able to take on your tax return. Adjusting your APTC during the year can help you avoid owing taxes when you file your tax return.

MEC eligibility when Marketplace does not discontinue APTC.

If an individual is enrolled in a qualified health plan for which APTC was made and the individual is or will soon become eligible for other MEC, you must notify the Marketplace about the other MEC and that the APTC for the individual’s coverage should be discontinued. If the Marketplace does not discontinue APTC for the first calendar month beginning after the month you notify the Marketplace, the individual is treated as eligible for the other MEC no earlier than the first day of the second calendar month beginning after the first month the individual may enroll in the other MEC.

For this situation –

January – April, he is eligible for the APTC. 1095-A is correct for those months. The change in coverage available was reported to the Marketplace. Marketplace insurance was continued.

May – Since the Marketplace did not discontinue APTC beginning in May, he is treated as eligible for May. 1095-A remains correct for this month.

June - October, he received APTC but was eligible for MEC.  1095-A columns A and B are incorrect for these months.

November – December, he received no APTC, and this is reported correctly on the 1095-A.

You will need to change the entries in columns A and B for the months of June – October to match the numbers listed for November and December.  This will allow for the payback of the APTC for the month received where he was eligible for MEC.

This is based on example 3 in Pub 974. The examples referenced can be found here.

@piersons 

[AmeliesUncle]

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@piersons wrote:

So 2 questions: 1) Do in fact the APCTs/PTCs he received for May thru Oct need to be repaid in full ? and, if so, 2) how do I reflect this in his tax filing via TT without affecting the PTCs for Jan thru April?            

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1) Yes.

2) for May-October, enter 0.01 for the SLCSP (column B of the 1095-A).

[AmeliesUncle]

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@CatinaT1 wrote:

The 1095-A needs to be entered exactly as it was received. 

The Premium Tax Credit is calculated on an annual basis, not a monthly basis. 

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That is SO wrong.  Have you looked at the 8962?  Do you think lines 12-23 are just on there for entertainment purposes?