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Different treatment of excess estimated payment for tax year 2019 in TurboTax Premier 2021 vs TurboTax Premier 2020.

I overpaid estimated payments for 2019 tax returns.  My 2019 tax return was submitted in 2021 and received CA refund in 2021. 

When  I entered the state refund for tax year 2019 in federal tax return using TurboxTax Premier 2021,  the refund was apparently considered my income, which resulted in I having to pay back a large amount of Advance Payment of  Premium tax credit for Covered CA health insurance.  

Comparatively , if I use TurboTax Premier 2020 to report the state refund for 2019 tax year, TurboTax 2020 would ask me the prepayment amount and determines that the refund should not be taxed and therefore not affect my eligibility for Advanced Premium Payment assistance.

 

My question is how I can enter my 2019 estimated payment in TurboxTax Premier 2021 so that I am not penalized for excess payment in 2019.  In  TurboTax  2021, if I select the state refund tax year as 2020, the software would ask me my estimated payment for 2020 and determine that the refund is not my income and therefore not impose tax on it. However if I select  the refund  tax year as 2019, TurboxTax 2021 would ask question related to standard deduction vs itemized deduction and end up increasing my income amount, impose tax on my excess estimated payment and make me pay back premium assistance.

 

Please help!

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2 Replies

Different treatment of excess estimated payment for tax year 2019 in TurboTax Premier 2021 vs TurboTax Premier 2020.

since the refund was received in 2021, that's the year you must report the taxable portion of the refund, if any.

see instructions to schedule 1 on page 85 of the 2020 1040 instructions. 

 https://www.irs.gov/pub/irs-prior/i1040gi--2020.pdf 

you may also have to refer to IRS publication 525 page 23

https://www.irs.gov/pub/irs-pdf/p525.pdf 

 

you only report the portion. if any that is taxable

 

 

 

 

Different treatment of excess estimated payment for tax year 2019 in TurboTax Premier 2021 vs TurboTax Premier 2020.

Thank you.

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