ACA & 1095-C

[GetzMoolala]

My daughter changed job in September, 2021.  Her new employer didn't offer her health insurance until November, 2021.  Meanwhile, we covered her with our ACA policy from September to December without realizing her employer's insurance offer in November.  We paid 100% for the ACA allocation. 

My questions are:  Do I need to reduce the ACA premium credit for Nov and Dec?  If so, how do I go about doing it (i.e. what forms and where to remove her portion of the ACA subsidies)? 

(Note:  My daughter received a 1095-C from her new employer notifying IRS that she was offered insurance for Nov and Dec).

[ColeenD3]

Please see this answer from LindaA. Although it is from a previous year, the information still applies.

You'll need to indicate how long you were covered by either plan in 2016 (in your case, all year) and enter information from the Form 1095-A for your marketplace plan. 

Go to the Health Insurance section and indicate that you had coverage all year (since you had marketplace coverage for 6 months and employer-sponsored coverage for the other 6 months). Continue through the interview and answer the marketplace questions:

• Were you enrolled in any of these less common plans in 2016? Yes
• What type of plan were you enrolled in? Obamacare plan (1095-A) 
• Do you have a 1095-A form to enter for your Obamacare plan? Yes 

Next, enter the information from your Form 1095-A (Health Insurance Marketplace Statement), then continue answering the questions in the Health Insurance section. When you're finished, TurboTax will display That's all we need on your 2016 coverage.

Note: You may receive a Form 1095-C for your employer-sponsored coverage, but this form isn't needed to file your tax return. Just be sure to store it with your records.

[GetzMoolala]

Thanks for your answer.  The complexity comes in when we covered her for 4 months (Sep - Dec, 2021), she was offered insurance from her new employer for Nov and Dec but declined because we covered her during the 2 months. 

By declining the coverage from her employer for Nov and Dec, she wouldn't qualify for premium tax credit for these 2 months.  As such we need to reimburse IRS for my daughter's portion of the advance payment.    My daughter's portion is simple in calculation because we didn't have her from January through August.  The difference in premium times 2 would be what we need to reimburse to ACA.  The question is:  How do I go about reimbursement the premium tax credit in TurboTax Deluxe, perhaps with a note explaining the situation?

[ColeenD3]

Form 8962 takes everything into account. You do not need to include any explanation to the IRS.

[GetzMoolala]

Thanks ColeenD3 for your help again. 

I would assume the amount of over tax premium payment credit need to be changed in the monthly max premium assist column but those were calculated so can't be modified.  So where in Form 8962 that would allow me to change the the reduce premium assist amount?  The alternate calculations area seems to be mainly for marriage changes.

[DawnC]

Nothing needs to be changed on the 1095-A or the Form 8962.   If you have to repay any of the advanced premium tax credit, TurboTax will calculate that amount for you.    Once you have completed entering your 1095-A, TurboTax will complete Form 8962.     If there was any tax credit given that you ultimately did not qualify for because of work changes or other lifestyle changes, that amount can be found on Line 2 of Schedule 2 Form 1040.   

[GetzMoolala]

Thank you DawnC for your answer but there are still something missing as explained in my earlier reply as TurboTax didn't compute the amount correctly without corrections in 8962.  I will explain one more time:

My daughter (who is not my dependent and filed separate return) changed job in 2021.  She started new job late Aug but can't get insurance until Nov 1 under 4980H.  So we covered her with our ACA plan from Sep thru Dec and I paid for her entire insurance premium.  So my policy allocation is 100% and her allocation is 0%.  We received advance premium credit that included my daughter from Sep through Dec as documented in 1095-A from the IRS.

Meanwhile, my daughter just received a 1095-C from her employer showing that she was offered and declined insurance through the company in Nov and Dec because she was already covered by our ACA plan in Nov and Dec.  Because she declined, she is not eligible for premium credit for Nov and Dec, which we already received advance premium credit for Nov and Dec per 1095-A from the IRS.  Because we didn't have her under our plan from Jan through Aug, the excess advance premium credit is simply the amount we received in Nov and Dec minus the monthly amount we received prior to Sep.

For the life of me, I cannot find anyway of putting that credit back by overriding in 1095-A worksheet, 8962 or even schedule 2.  Perhaps I am missing something in TurboTax.

So I am asking the community with many tax experts on how do I go about returning the premium credits for Nov and Dec which we already received per 1095-A from the IRS?  I thought, perhaps I am wrong, we can simply put the credit back through excessive advance premium credit after filling out 1095-A form in TurboTax as received from the IRS.  Does any tax experts understand the situation now?

[GetzMoolala]

I think I just figured out how to reimburse the advance premium.  In TurboTax's 1095-A Statement, I updated the Nov and Dec entries for Part III Column A (Monthly enrollment premiums) and Column B (Monthly SLCSP) to the actual costs without including my daughter but kept the Column C (Advance payment of premium tax credit) as listed in the original 1095-A sent to me by the IRS.  This effectively acknowledging that the IRS gave me the advance credit for insurance that only qualify for us without my daughter.  As a result, the advance premium is reimbursed to the IRS by reducing my incoming tax refund to the exact amount it should have been without my daughter getting the premium credit.  I also changed my daughter's coverage termination date on Part II column E to end on 10/31/2021 instead of 12/31/2021.  This will provide IRS the same eligible coverage date as shown in the 1095-C given to my daughter by her company.  By following these steps, everything works out for us, the IRS, our daughter and her company.  Now I just hope IRS accepts this solution.