Entering 1095-A information causes tax due instead of refund

[taxmandad]

I need help about a 1095-A data.  I'm doing tax return for my son who had 2 jobs in 2022.  In his 1st job at Company A, he bought insurance thru Covered CA from Jan 2022 up to Jul 2022.  In Aug 2022, he started a job in Company B and was covered thru company insurance.  He did received a 1094-A.  Before I entered the 1095-A data, TurboTax showed a Federal and State refund.  After I enter the 1095-A data, the Federal refund turned into a tax due, and the State refund decreased.  I looked in Form 8962 and it turned out that because the AGI was more than the income when he applied for the Covered CA insurance, he has to pay back some amount.  However, I think this is wrong.  His income was the same from Jan 2022 to Jul 2022 and he was eligible to get the benefits from Covered CA insurance.  He stopped this insurance when he was employed with Company B, therefore the income from Company B should not be considered in calculations of Form 8962.

Question is, how should I do the entry for 1095-A to get the correct tax due or refund? Or is it possible to file 2 separate tax returns for each income situation?  Thank you for your help

[xmasbaby0]

When your son started getting health insurance through the employer----did he inform the marketplace that he no longer needed coverage through that plan?  Did he tell them to stop paying for their part of his monthly premiums for the Covered California plan?

[DawnC · Accepted solution]

No, he has to file all his 2023 income and credits on his 2023 return.  

This tax credit works differently than most.  It is based on his actual total yearly income, not what he estimated.  The premium tax credit was available immediately when he enrolled in a plan through the Marketplace.  It worked like a discount so he could get help to pay for coverage throughout the year rather than having to wait until he filed his 2023 taxes.  Payments of the premium tax credit went directly to the insurance company to pay a share of the monthly health insurance premiums charged to him.  The amount was calculated based on what he estimated your 2023 income would be, along with how many people his plan needed to cover and where he lived.

Now that he is reporting your actual 2023 income, ZIP code, and family size, we used this info to calculate the discount he should've received throughout the year, and made the necessary adjustment.   

If you benefit from advance payments of the premium tax credit, it is important to report life changes to the Marketplace as they happen throughout the year.

Certain changes to your household, income or family size may affect the amount of your premium tax credit.  These changes can alter your tax refund, or cause you to owe tax.  Reporting these changes promptly will help you get the proper type and amount of financial assistance.  For more information, see the Changes in Circumstances section of our Claiming the Credit and Reconciling Advance Credit Payments page.

From Healthcare.gov:

If you're enrolled in a Marketplace plan and your income or household changes, update your application as soon as possible.

These changes — like higher or lower income, adding or losing household members, or getting offers of other health coverage — may affect the coverage or savings you’re eligible for.  After you finish applying or enrolling, you may be asked to submit documents to confirm your income.

Discover which changes to report.

Learn how to report changes.

[Mike9241]

one return for one individual. as others have pointed out the PTC allowed is figured based on his income for the entire year even if he was only covered for 1 month. 

[taxmandad]

Yes.  1095-A data shows payments were done from Jan up to Jul 2022 and 0 from Aug to Dec 2022

[taxmandad]

Thank you for the clarification.  No. there was no changes, other than income from Company B.