HRA and premuim tax credit

[RMBeachy42]

I'm retired and my employer provides me with an HRA which covers my monthly insurance premium. When I signed up for this I had to elect the HRA or the premium tax  credit and was told I can't get both.   "If the HRA is considered “affordable,” and you accept the HRA, you aren’t eligible for the premium tax credit for your Marketplace coverage."  But now when I enter the information from my 1095-A into turbotax it is calculating a big refund based giving me the premium tax credit. Do I qualify for this? I don't see a way of reporting that it was paid for by my HRA.

[DaveF1006 · Accepted solution]

No, according to this bulletin from the marketplace, you should not be receiving a premium tax credit. According to Turbo Tax agent ThomasM125 in his post, "do not report the 1095A unless you received advance premium tax credits or qualify for a premium tax credit, which you don't". Delete the 1095A because this does not need to be reported.

[RMBeachy42]

Thanks, I deleted the forms but now TURBO TAX says if I don't report my 1095A and I have an Affordable Act Insurance Plan  the IRA will reject my return.  Should I just ignore this and try to submit without reporting the 1095A?

[DaveF1006 · Accepted solution]

Yes, perhaps a qualifying question that Turbo Tax should ask if you have an HRA. If this was a qualifying question in the return, then it would exclude the premium tax credit (PTC). Your situation is that if you enter the 1095A information in the return, it will give you a premium tax credit you don't deserve and Turbo Tax does not address the fact you have an HRA.  Based on this, here is my advice.

1. Indicate in Turbo Tax you did not receive a 1095A. You will receive a letter shortly from the IRS asking why you did not submit your 1095 A in your return.
2. At this point, the IRS will ask you to submit your 1095A and may ask for an 8962. At this point, you will send in the 1095A plus a statement alluding to the fact you have an HRA and the marketplace will not allow you to claim a premium tax credit. Also, Turbo Tax does not address this in their program. Also state that you did not include an 8962 because the PTC is not allowed.

@RMBeachy42 

[thoppie]

Is TurboTax planning to fix this oversight.  I don't want to deal with the IRS if I don't have to.

[rksteinbr]

I have the same problem.  It appears that Intuit is not going to fix this error.

[BillM223]

Here is a possible workaround (no guarantees).

Check the box that you have a 1095-A. Start the interview. When you get to the "Let's get the Info from your 1095-A Form", enter column A as it reads on the 1095-a, but enter columns B as the same dollar amounts as Column A, and enter column C as 0.00 . 

This will set the Premium Tax Credit to zero. 

Of course this may trigger a letter from the IRS (I have no way of knowing), but at least you can answer that you did this as a workaround on your tax software because you had an HRA and should not have received any PTC. Your change was to ensure the correct tax on your return.

[rksteinbr]

Thanks for that potential workaround.  It would seem like a good alternative but I just tried it out and I still get a calculated tax credit although much smaller.  It looks like I'll just have to say I don't have a 1095-A and deal with any consequences.  Turbotax gives a warning that my return will be rejected by the IRS if I don't enter the 1095-A.

[ShirlynW]

Check your Health.gov account.

1. Log in your Health.gov account.
2. Under "Your Existing Applications," select your 2022 application.
3. Select “Tax Forms” from the menu on the left.
4. Download all 1095-As shown on the screen.

If there are no tax forms, I suggest call Health.gov

1-800-318-2596 (TTY: 1-855-889-4325). They are available 24 hours a day, 7 days a week (except holidays)

@rksteinbr