Expected timing of the software update for elimination of APTC repayment for 2020

[Sgweiss]

Thanks for helping us but I’ve read the language in the bill and every interpretation of it. I don’t understand what the issues are or why the irs needs to issue guidance.

[Anonymous]

@Sgweiss 

There are numerous issues. For one, the IRS has asked that taxpayers wait for guidance. 

The APTC, like most things in tax code, isn't as simple as it seems.  This part of the tax return mixes in with many other parts of a taxpayer's return.  The net premiums paid become part of the calculation of other things, such as a self-employed taxpayer's deduction for self-employed health insurance.  

For some taxpayers, this change along with others isn't just "don't pay excess back" but can also mean the taxpayer could be entitled to an additional credit - so someone has to figure that math out and program for it. 

The deduction normally taken for health insurance, particularly by the self-employed, which is one of the issues in limbo, also changes the calculations for allowable retirement plan contributions. It affects other taxes on the return.  The IRS has not advised how to handle these interdependent areas. 

There are dozens of things on the return affected by this issue.   It is what it is.  Guidance is required.  

[Subsidyhit]

GOOD NEWS$

DONE.....DONE....DONE

I just UPDATED my TurboTax Home & Business and APTC repayment has been eliminated!!!!!

The repayment is on 8962 Form, line 29, but NOT on 1040 Form, line17 and NOT on Schedule 2, line2

no email notification from TurboTax

no guidance from IRS - (still says Check Back)

[Subsidyhit]

So the SOFTWARE has been UPDATED !!!

[Sgweiss]

I just did mine and yes!!!  Thanks for the heads up!  Now I’m trying to understand why I had to sign up for Credit Karma. I said skip but turbo tax kept sending me to the links. 

[usatax]

The repayment is gone as of this morning's update.

Oddly, when I print "all offical forms required for filing", the form 8962 doesn't print. It is not part of the tax return printout (I'm using TT deluxe desktop). I wonder if it is being transmitted as part of the e-file?

It is a required form if one has Covered California insurance.

[Johnny Doe]

Form 8962 along with Schedule 2 has been deleted from returns that had them before the update of 4/8/2021. 

[djpen123]

I see they removed form 8962 and Schedule 2. My refund went up by $1,500, not the $2,700 that if showed I wouldn't have to pay. I'm waiting for further guidance and for the forms to be included.

[Subsidyhit]

Schedule 2 also includes Self-Employment taxes.

Self-Employment tax, Part II, Line 4, I owe money here. and the form is included.

Form 8962 is not included in the printout, and logically if you don't owe repayment why would it be included.

[mrpooh]

Yes, that makes sense.

I am using TurboTax Home & Business and echo what others have said - as of today (Thurs April 8), the projected changes/implications of the American Rescue Act  have been implemented/incorporated into the TurboTax forms.  And there is a corresponding change in my tax liability.

Form 8962 is still used (maybe not included with forms ultimately sent to the IRS when filing) and a calculation is indicated on Line 29 of that form, but any amount on that line which would have been owed back is now NOT included on Form 1040 line 17, nor on Schedule 2, line 2.

What's interesting is a note at the bottom of the IRS page here indicates that as of today it has not been updated since March 16:

https://www.irs.gov/affordable-care-act/individuals-and-families/premium-tax-credit-claiming-the-cre...

Hopefully there won't be further backs and forths, and hopefully all calculations throughout all forms are taking into account these changes (they seem to have), and hopefully the coast is clear to submit tax forms now.  But just the same, since there still is time before the filing deadline, I'm waiting a little while before filing to make sure there are no bugs that need ironing out.

[djpen123]

I see the amount is correct based on the recalculation. Good to go!

[hbomb1]

It seems that they haven't accounted for this in the self employment deductions for health insurance. I would assume we cannot deduct the amount of the APTC since we don't have to pay it back?

[mrpooh]

I'm self-employed, using Home & Business version, and it was taken into account.   

Maybe it depends on how and where you enter your info with TurboTax. 

I entered all my info under the section that relates to purchasing a plan on the Marketplace.  

I did not enter it in the Self-Employed section.

And even though I did not enter it in the Self-Employed section, any credits or deductions show up in the Self-Employed part of TurboTax.

I believe that's the way to go.

[hbomb1]

Interesting. In my case it's using the total price of my plan prior to the APTC. First column (A) of the 1095-A adds to $7800, and the last column (C) was $1660 (which previously I had to repay). But still showing the $7800 as a business deduction on schedule 1 Line 16.

I also entered it in the Personal - Medical section. Not under business expenses.

[LinaJ2020]

The program has not been completely updated yet.  Our engineering team is in the process of fixing it. 

There are the issues:

1. Clients are itemizing with medical expenses and have APTC. The reduction of the APTC isn't reflected on Schedule A for the medical expense deduction. This causes an overstatement in medical premiums paid. If the client isn't itemizing on their federal return, but has entered medical expenses, then watch for how this affects the state return(s).
2. Clients have a Self-Employed Health Insurance Deduction and APTC. The reduction of the APTC isn't reflected in the Self-Employed Health Insurance Deduction. The deduction needs to reflect the premium amount actually paid vs. the entire premium.