Form 8962 Tax Credit Calculation Error - TurboTax Desktop

spaceoddity · Jan 13, 2023 12:15:05 PM

UPDATE 1: Higher-level moderators have said that this issue is being worked on. However, the form is still marked as "Ready to File." I highly recommend waiting until this gets marked as "Not Ready," as a sign that they are indeed in progress of changing. TurboTax Desktop (Home and Business) says that Form 8962 for calculating health care premium tax credits is complete and ready to file. However, it is NOT setup correctly, and will not calculate the proper subsidy amount for filers with incomes above 400% of the poverty level. Here is a summary of known issues: <UL><LI>TurboTax Desktop incorrectly calculates that any income level over 400% of federal poverty level (FPL), do not get a tax subsidy. This is incorrect according to the IRS. The "cliff" for above 400% was removed for 2021 and 2022 filing.</LI><LI>The worksheet doesn't calculate the proper percentage of the poverty line above 400% at all. It just sets it at 401%, if it's over at all, and refuses to calculate the proper subsidy above 100% FPL.</LI><LI>Update 2: I was incorrect about the FPL. IRS uses the previous year FPL for these calculations. Apologies! <STRIKE>The worksheet for Form 8962 appears to be using 2021 federal poverty level. For a family of 3, according to the IRS, the poverty level for 2022 is $23,030. TurboTax is using the 2021 number of $21,960 (for 48 states+DC). See here: <A href="https://www.healthcare.gov/glossary/federal-poverty-level-fpl/" target="_blank" rel="nofollow noopener noreferrer">https://www.healthcare.gov/glossary/federal-poverty-level-fpl/</A></STRIKE></LI></UL>So the current software version doesn't properly calculate the tax credits foy anyone above 400% FPL.