We are married filing jointly with a combined total income of roughly $65K for 2020. Yet, TT says I owe the feds almost all of the premium tax credit I received to offset my 2020 health insurance premiums. How is that possible? What formula is being used? The IRS indicates the repayment limit would be no larger than $800+/-. Please advise.
When you apply for coverage in the Health Insurance Marketplace, you have to estimate your expected income for the entire year. Whenever the estimate is off, sometimes you'll have to pay back any excess.
In certain situations, the repayment of excess Advanced Premium Tax Credit isn't limited to the amounts you're referring to. Different repayment limitations may apply, or there may be no repayment limitation in such circumstances.
Please see Excess APTC not limited to amounts in Table 5 in the Instructions for Form 8962 for more information.
The calculation Form 8962 is extremely complicated, even by IRS standards. See page 1 in the link for the computation.
You may need to correct the SLCSP (second lowest cost silver plan) information on your 1095-A. If it says 0.00 it will not calculate any credit for you. If the SLCSP number is incorrect, then the credit will be wrong. Go to https://www.healthcare.gov/tax-tool/#/ and "figure out your premium tax credit" by using their "health coverage tax tool" software via the related "get started" button. Find the actual SLCSP amount for each month and enter it where you enter the 1095-A information. Then, TurboTax will calculate a premium tax credit for you.