IDAHO 2020 Health Insurance and Long-term Care Insurance Deduction Limitations WORKSHEET questions

[BlizzMan]

For tax year 2020, I am uncertain how to properly fill out the IDAHO 2020 Health Insurance and Long-term Care Insurance Deduction Limitations WORKSHEET questions number 7 and 9.  I am filing MFJ.  Both my wife and I are retired, but not yet eligible for Medicare, etc.  We purchase our own private insurance via the Idaho Exchange and are utilizing an ACA plan that is HSA compliant and is PTC/APTC eligible.  For 2020, our Federal return indicates eligibility for full PTC.  We paid all the premiums out-of-pocket, but will get most/all of that back in PTC once we file for 2020.  The question is how this ripples into the Idaho state tax elements.  The above-mentioned worksheet tells us to ignore lines 1-6 of the worksheet and to enter zeroes for 8, 12, and 13 since we didn't itemize deductions for Idaho (nor did we itemize for Federal).  Question 7 of the worksheet says to "Enter the total paid for health insurance " which, I assume, is the amount we paid, out-of-pocket, for our ACA 2020 health plan each month (and which is reflected in the 1095-A we received from that plan for 2020).  Question 9 of the Idaho worksheet is really at the cruz of my question.  It reads "Enter the total health insurance costs deducted elsewhere on the federal return ...". 

As far as I can tell, from looking through all the Federal forms in my return, I have no health costs deducted anywhere in the federal return (and we were ineligible to itemize any medical).  BUT, it "feels" like I've gotten a deduction of sorts vis-a-vis the PTC that will ultimately come our way once we file federally and get the PTC deposited to our bank account.  The "C" in PTC is "credit" which is not "deduction."  There's the question really.  Are we allowed to put ZERO in Question 9 of the Idaho worksheet, OR, does Question 9 need to reflect the PTC amount that essentially nullifies health insurance costs to us for the 2020 year (once it finally lands in our bank acount, that is)?  I called the Idaho Tax Commission, and the person I happened to get on the "help line" said the PTC is a credit and is NOT a deduction and that I COULD put ZERO in Question 9 of the Idaho worksheet.  It feels odd that I would be able to deduct the health premiums in Idaho if I got full PTC, federally.   Would be most grateful for experts to weigh in here and set us straight.  I'm not sure how to proceed with Idaho Health Insurance worksheet that ultimately feeds Idaho "Form 39R, line 18 . "

[BillM223 · Accepted solution]

"Question 7 of the worksheet says to "Enter the total paid for health insurance " which, I assume, is the amount we paid, out-of-pocket, for our ACA 2020 health plan each month"

Here you enter the amount out of pocket for health insurance premiums LESS any PTC that you were credited with at the end of the year. You are right to be suspicious - the state wants to know your NET health insurance premiums (which might be zero). Otherwise, you would be double-dipping - getting a deduction and a credit on the same dollars.

"Enter the total health insurance costs deducted elsewhere on the federal return ... "

This would be referring to any other health insurance not previously referred to on line 7. Actually, I am flying a bit blind here, because I am not easily finding this worksheet, but I can imagine what it wants to know.

This would refer to long-term care insurance, dental insurance, and other health insurance not in your original health policy (i.e., line 7). Note that you would not enter any premiums paid through your HSA, since you have already gotten the tax benefit from the contributions.

I would expect, given your description, that you would enter zero or close to it for line 7 (whatever the net amount is for your out-of-pocket premiums less refunded PTC), and zero for line 9.

Make sense?

[BlizzMan]

Bill, YES!!!  That makes total sense to me and cogently addresses my entire line of questioning.  I very much appreciate the time you took to formulate your reply.  I only wish the Idaho form instructions provided a little more beef surrounding this section.  There is not a single mention of how to factor in PTC/APTC into the values that get placed into the worksheet.  But, my inner alarm bells were going off that I somehow needed to reconcile the PTC against what I paid out-of-pocket and your answer confirms it and lines up with every common sense perspective I've suspected should apply here.  On a positive note, Turbo Tax DOES seem to properly handle this, but the "math behind the scenes" is not transparently available to me like in some older versions years ago where you could inspect program calculation methods and "data sources" a bit with right clicks.  Oh well!  

THANK YOU and may 2021 and the future be good to you and your family:-)