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I began my return on Monday and the information I entered for 1095A reduced my refund amount. I opened my return today, Friday, to complete and file but my refund amount is different by the amount of 1095A. Why would this information change?
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Because of the American Rescue Act, there have been changes to how the reconciliation of the Premium Tax Credit (PTC) is handled.
Form 1095-A reports on what you paid the insurance company, and how much Premium Tax Credit was paid to the insurance company on your behalf. However, the amount of PTC is based on the amount of income you estimated at the beginning of the year.
At the end of the year when your real annual income is known, form 8962 is completed to reconcile the PTC, that is, were you paid too much or too little PTC?
Up unto just a few weeks ago, the practice was that if you had more income for the tax year than what you estimated at the start of the year, you had to pay back some or all of the PTC that had been paid for you. This would commonly reduce your refund. This repayment would appear on line 2 on Schedule 2 (1040).
However, the American Rescue Plan states that no one has to pay back PTC in this case, so TurboTax and the other tax software vendors have been busily updating their software to try to handle this.
So once this change is in the software, it is possible for your refund to increase, but I don't know (1) if your refund amount increased or decreased, and (2) what "amount of 1095A" you are referring to (there are several amounts on the form 8962, which arise out of the 1095-A).
So if your refund increased by the amount of PTC that you had to pay back (used to be on line 2 of Schedule 2 (1040), then this shows that the change has been implemented for your return.
If this doesn't make sense, come back and tell us what changed on your return (i.e., amounts and on what forms and lines).
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