My situation is similar to that of @mrpooh. When I saw that the most recent TurboTax update removed the repayment of the excess premium tax credit, I thought the software update was complete, so I e-filed my amended 2020 return (required because I'm newly eligible for the Saver's Credit). However, IRS has now twice rejected my 1040-X amended 2020 return with the message:
- Schedule1_Self-Employed_Health_Insurance_Hold_Rule - Your federal return was rejected due to an issue with Self-Employed Health Insurance Deduction on Schedule 1: Additional Income and Adjustments to Income
I believe the problem is that while the repayment is removed, reducing my tax liability on the return, the SE Health Insurance Deduction was NOT reduced by the repayment amount that was waived.
I have the same issue - but I'm stuck as my State return is due already; my State does not have an extension. Very frustrating, as I feel like I have paid for Turbotax, spent hours on it, and the result is that I cannot actually use it to file my taxes.
For the record, I have no APTC repayments due.
I am thinking of requesting a Fed and State extension, but paying now what TT says I will owe for both - to hopefully avoid penalties.
That could be the issue. Try to following and then attempt to e-file again. @akw-mo
You can enter the 1095-A as is, but don't link it to your business Schedule C and then manually enter the correct amount you paid as a Schedule C self-health insurance premium expense. If you don't link it to your business, the medical premium deduction will go to Schedule A instead of Schedule 1. See the Medical Expenses worksheet, Line 2b and enter a reimbursement of that amount (as a positive #) on Line 13a of the same worksheet to remove the personal deduction on Schedule A.
If entered in the Schedule C section, the expense will go to Line 16 of Schedule 1.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
It looks to me that Turbotax is not calculating the Premium Tax CREDIT either. Form 8962 line 26 is blank even if the the eligible credit is greater than the advance payments made.
I see most users are having trouble when repayment was being calculated but calculations are incorrect when the credit is due as well.
When will this be fixed?
I am also confused by how TurboTax implemented the Relief Act change of not requiring repayment of APTC (Advanced Premium Tax Credit) for 2020. The update is counting any overpayment of APTC as reimbursed medical expense on line 2b of the Medical Expenses Worksheet which ends up with a lower amount of medical expense on Schedule A Line 1 by the amount of the excess APTC.
While this does appear to comply with the instructions for Schedule A (Pub 502 - "You can't include in medical expenses the amount of health insurance premiums paid by or through the premium tax credit. You also can't include in medical expenses any amount of advance payments of the premium tax credit made that you did not have to pay back."), it does not seem consistent with the IRS decree referenced above which says that if someone has already filed a return before this decree on APTC that the IRS will remove any amount from 1040 Schedule 2, Line 2 ("The IRS will reduce the excess advance Premium Tax Credit repayment amount the taxpayer reported on their 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, and Line 29 of Form 8962 to zero and process their return. There is no need to contact the IRS. If a taxpayer receives a IRS letter about excess APTC for tax year 2020, they should disregard the letter.") It mentions nothing about them adjusting Schedule A.
Based on my reading of these various components, it looks like I would have been better off filing my return before any of these updates were made by TurboTax and then waiting for the IRS to send me a check for my overpayment of APTC.
I know that this has been a difficult year due to the last minute and retroactive tax code changes, but honestly, I am about ready to give up.
@DawnC I tried your workaround, but it didn't work. I completed each of the steps as you instructed, but perhaps because I did so on my amended return, TurboTax gave me a warning not to start over with my amended return until the IRS accepted my already e-filed amended return. Consequently, the tax refund amount that appeared was also significantly incorrect, showing a balance due greater than my expected refund, basically omitting my excess advance premium tax credit from my original return that was e-filed in Feb, long before the UCE guidance was incorporated into TT software.
Is the problem of the waived repayment not reducing the SE health deduction going to be fixed soon? I installed today's update, but this issue still is not resolved.
From another thread below:
As mentioned in the last Post and my direct experience as of 6pm today....with the 04/15/2021 Update my Federal Taxes have changed by $100+. So, some calculations have changed as of today. What changed?
Again TurboTax Experts, we all need to understand:
1) What is going on in general with release timing and the Bugs & changes to be fixed on each date?
2) What was updated on 04/15/2021?
3) When we can expect a successful filing with all changes and bugs fixed?
4) Do the TurboTax Experts have access to the developers and designers or are you just giving us intelligent estimates of what might happen?
Please do some research before responding and Thank You for your efforts in these Trying times.
@DawnC -- I'm still hoping you'll reply to my most recent post stating that your workaround for reducing the SE health insurance deduction by the amount of the waived repayment of excess premium tax credit did not work. Please advise.
I was finally able to e-File with Acceptance of Federal & State last night.
Do not know why, or what was changed, but the 4/15/21 update seemed to fix my e-Filing issues.
Calculations were changed and my Federal Taxes did go up a by $100+.
One of the screens on the desktop application page had a message indicating that the projected fix date would be by the end of April, and that I would be sent an email notification when the coast is clear to file the return. And that the proper calculations would be in place and all one would have to do is take the step to file the return. Otherwise, if one submits the claim now, one might have to resubmit an amended return later.
I accidentally had my daughter (who is not a dependent) on my Covered California account from January-May while she had separate coverage from her employer. So I received additional premium tax credits for her for those 5 months that I am now on the hook to repay.
Does anyone know if under this new elimination of APTC repayment, I would qualify? Or is it just for people who had a change in income level?
has this update happened? I had the same issue as others, return rejected for "Schedule1_Self-Employed_Health_Insurance_Hold_Rule - Your federal return was rejected due to an issue with Self-Employed Health Insurance Deduction on Schedule 1: Additional Income and Adjustments to Income"
There is no more pop up in turbo tax that I need to wait for an update but the deduction is still on Schedule 1.
If I refile will it be rejected again?