I was given the Advanced Premium Tax Credit on my health insurance, but ended up unemployed and made <100% of the poverty line. Doesn't this mean I need to pay it back?

[ECStephens93]

At the beginning of 2020, I called the Healthcare Marketplace asking what to provide as my current income, as I didn't have a job at the time but was anticipating starting one. They told me to enter the amount I expected to make. As a result of the number I provided, I was given premium tax credit ($61/month) taken out of my monthly insurance premiums. However, due to the situation with COVID and other life complications, I had to leave that job shortly after starting it, and only ended up making $557 in the entire year. I forgot to go back and update the Marketplace with the change in income, and the APTC was applied for the whole year.

Now, after doing my research, it appears that anyone that makes less than 100% of the federal poverty line - $12,760, which I made much less than - is not eligible for the APTC. If that means I have to pay it back, that's fine, I can and will do so. But TurboTax isn't reflecting this - despite entering my low income, TurboTax reports I'm eligible for a total of $2200 in premium tax credit and is trying to claim that in a refund for me via form 8962. Is TurboTax aware of this potential situation, and is there any way to address it?

A couple of other things to note: I'm aware that there's a cap (for a single filer under 200% of the FPL, $325) on repayment of the Premium Tax Credit, but I don't know if this applies to me in this situation. I'm *also* aware that there are provisions in the American Rescue Plan Act that also affect the repayment caps.

[JohnW152]

No, not necessarily.

According to Who Can Take the PTC in the Instructions for Form 8962,

having household income below 100% of the federal poverty line will not disqualify you from taking the PTC if you meet certain requirements. 

Per the instructions,

You may qualify for the PTC if your household income is less than 100% of the federal poverty line and you meet all of the following requirements.

• You or an individual in your tax family enrolled in a qualified health plan through a Marketplace.

• The Marketplace estimated at the time of enrollment that your household income would be at least 100% but not more than 400% of the federal poverty line for your family size for 2020.

• APTC was paid for the coverage for one or more months during 2020.

• You otherwise qualify as an applicable taxpayer (except for the federal poverty line percentage).

You do not meet the requirements under Estimated household income at least 100% of the federal poverty line if:

• No APTC was paid for your or your family's coverage; or

• You, with intentional or reckless disregard for the facts, provided incorrect information to a Marketplace for the year of coverage.

[ECStephens93]

Right - I understand that there are some exceptions, but I don't know if they apply to me or not, since a lot of this sounds kind of subjective. I'm concerned that this falls under "reckless disregard for the facts" since I forgot to update my income over the course of the year.

[AmeliesUncle]

Even if you had updated the Marketplace, you still would have received Advance payment in January.  That qualifies you for the credit because you received some Advance credit.

[ECStephens93]

Alright, understood. Thank you, you two. I'm going to give support a quick call tomorrow just to go over a couple of other things, and perhaps bring this up, but if all is otherwise good then I'll file it the way TurboTax is guiding me to, then. Hopefully if the IRS disagrees then they'll just decline the return, and if so then I'll go from there. I'll post back later if anything goes wrong.