Premium Tax Credits excess repayment for 2020 in the American Rescue Plan

[jimgarrison]

Great...the Form 8962 still shows all the information and excess credit...it just doesn't go anywhere.

Is there anything in Turbo Tax to read about this particular update etc.?

I had thought the change was just applicable to 2021 and 2022 so this is a pleasant surprise!

[DoninGA]

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@jimgarrison wrote:

Great...the Form 8962 still shows all the information and excess credit...it just doesn't go anywhere.

Is there anything in Turbo Tax to read about this particular update etc.?

I had thought the change was just applicable to 2021 and 2022 so this is a pleasant surprise!

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Unfortunately there is nothing to read in TurboTax concerning this PTC adjustment.  This adjustment is a one-time provision only applicable to tax year 2020. 

In 2021 and 2022 the American Rescue Plan Act of 2021 will significantly increase premium subsides. 

[jimgarrison]

I just noticed that the update reflecting the premium tax credit excess repayment is not complete.

The excess premium tax credit that is no longer required to be repaid, is still reflected as an additional medical expense deduction.

Since taxpayers are no longer required to re-pay the premium tax credit, this additional amount should NOT still be reflected as an additional medical expense deduction.

[zacknauth]

It works correctly on my Home and Business download.

[stevek]

It works on my TT Home & Business edition also. Good job TT!

[scottrier]

Does it work in the online version yet? Has anyone tried that? Haven't downloaded the program for years...

[jmwTX]

Well this took care of my concern why isn't it showing I owe money. But now I have another concern:

The process remains unchanged for taxpayers claiming a net PTC for 2020. They must file Form 8962 when they file their 2020 tax return.

The IRS also says:

You must file Form 8962 with your income tax return (Form 1040, 1040-SR, or 1040-NR) if any of the following apply to you.

• You are taking the PTC.

• APTC was paid for you or another individual in your tax family.

• APTC was paid for an individual you told the Marketplace would be in your tax family and neither you nor anyone else included that individual in a tax family. See Individual you enrolled who is not included in a tax family under Lines 12 Through 23—Monthly Calculation, later.

If any of the circumstances above apply to you, you must file an income tax return and attach Form 8962 even if you are not otherwise required to file.

However TurboTax does not seem to be generating form 8962. What's up with that?

[DMarkM1]

The part of your post extracted below is the part of the tax law that has been waived.  You only need to include an 8962 if you are getting a refund of premium tax credit.  If your return is not showing a refund of (net) premium tax credit then a form 8962 will not be generated. 

Line 8 of schedule 3 which shows up on line 31 of form 1040 is where any "Net Premium Tax Credit" would show up. 

In desktop versions you can use the "Forms View" option at the top right your page or in online versions follow these steps to get a forms view.

1. Click "Tax Tools" in the left hand menu
2. Click "Tools"
3. Click "View Tax Summary"
4. Click "Preview My 1040" in the left hand menu

"The IRS also says:

You must file Form 8962 with your income tax return (Form 1040, 1040-SR, or 1040-NR) if any of the following apply to you.

• You are taking the PTC.

• APTC was paid for you or another individual in your tax family.

• APTC was paid for an individual you told the Marketplace would be in your tax family and neither you nor anyone else included that individual in a tax family. See Individual you enrolled who is not included in a tax family under Lines 12 Through 23—Monthly Calculation, later.

If any of the circumstances above apply to you, you must file an income tax return and attach Form 8962 even if you are not otherwise required to file."

[zacknauth]

There is still a problem with a rejected return due to incorrect SE Health Insurance deduction, which is tied to an incorrect Form 8962

Although I am not being dunned the PTC repayment amount on the 1040 Schedule 2, it is still not correct on Form 8962, which shows an excess PTC amount showing. The Schedule 1 also shows a larger SE health insurance deduction than I paid in premiums. So I will check back tomorrow.

I finally figured out how TT is incorrectly calculating the SE health insurance deduction on Line 16 of Schedule 1 (1040). To the correct amount of actual premiums I paid, it is adding from Form 8962 the incorrect amount on Line 29 titled "Excess Advance Premium Tax Credit Repayment" (in my case, about $2000). TT should show this as a zero under the AR Plan, which would reduce my SE health insurance deduction amount by $2000.

[PullingMyHairOut]

Do you have state taxes?  Have you figured out the impact on the state form?

[zacknauth]

As I mentioned in another post, this problem has been resolved, I submitted my return, and it was accepted.