Form 8962 Tax Credit Calculation Error - TurboTax Desktop

[spaceoddity]

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:

• 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.
• 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.
• Update 2: I was incorrect about the FPL. IRS uses the previous year FPL for these calculations. Apologies! 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: https://www.healthcare.gov/glossary/federal-poverty-level-fpl/

So the current software version doesn't properly calculate the tax credits foy anyone above 400% FPL. 

[tagteam]

This will be reported.

[spaceoddity]

Excellent thank you!

[Critter-3]

This was reported several days ago and it will simply take some time to update the program. 

[jcpierson]

Thank you, I could not figure out why TurboTax was not automatically creating and filling in FOrm 8962 after I entered my 1095A.   I will wait for an update and hope/expect that will solve the problem.

[carpema]

Thank you.

I have reported the same issue.  Turbo Tax does not compete the 8962 and said that I have to pay the full premium tax credit back  I ran the same information in Tax Slayer says I only need to pay a small part of it back.

How will we know when this is fixed since we no longer get updated on what has been fixed/added/changed?

[Critter-3]

Simple ... when you log in the balance due or refund will be different.  Then go look at the form itself. 

[carpema]

Turbo Tax shows 8962 line 29 as 3444 for amount of Premium Tax Credit to pay back, Tax Slayer shows 356.  

In Turbo Tax, Using 1095-A I filled in all 12 months all the same and only Part II line 11f had a number in it.  Tax Slayer filled ion all spaces on line 11, a-f  

Someone has something wrong.  

[pdxtony]

There's a longer thread on this topic here: https://ttlc.intuit.com/community/taxes/discussion/re-turbotax-2022-form-8962-premium-tax-credit/01/...

In short the problems is that form 8962 line 11 isn't  transferring values from 1095a line 33 if your income is above that 400% of the poverty level.  This results in subsequent calculations being wrong.  And, you can't override and populate yourself. 

[CASteve]

Thanks for the update. I also reported this last week and they didn't seem to know what I was referring to. Seems they come up with the right contribution amount on line 8b according to the 8962 instructions for those over 400% but the table doesn't get populated by 8b and some of the data from 1095-A doesn't make it into the table.

[carpema]

Here is info in PUB 17

ARP expanded the PTC by elimi-
nating the limitation that a taxpay-
er's household income may not ex-
ceed 400% of the federal poverty

line and generally increases the
credit amounts. In addition, in
2022, if you receive unemployment
compensation, you are generally
eligible to claim the PTC if you
meet the other requirements. For
more information, see Pub. 974
and Form 8962 and its instructions.

[Polkadot1]

@carpema  It was also nice to see elimination of the 400% "cliff" mentioned in this month's AARP Bulletin, (Jan / Feb 2023 issue, page 6) further confirming that it is accepted gospel and TurboTax's 8962 form is inaccurately calculating the Premium Tax Credit for those of us at 401% Federal Poverty Level.  How many more sources do we need to quote to please TT?

Making Health Care More Affordable 

I'm not on Medicare yet. Is there anything in the law to help me afford ACA policies? 

Yes. The new law extends until the end of 2025 the expanded Affordable Care Act (ACA) premium subsidies that were instituted under the American Rescue Plan Act of 2021. This means that more people will continue to be eligible for the ACA subsidy and no one will have to pay more than 8.5 percent of their annual income for an ACA health insurance plan premium. 

[Critter-3]

If this is all about the line 11 not being used in the TT program on form 8962 that is because the program doesn't let you enter the annual column totals like a professional program does ... it requires you to enter every month separately ... but the program is completing the form correctly ... this is from my professional program (note a couple $$ difference due to the rounding)  ... compare it to the 8962 in your return. 

I should compute a partial credit but the rules do not say you don't have to pay back all of the advance credit you got ... just that the removed cliff allows you to have some of the credit ... that you don't need to pay it all back.

[Critter-3]

Even if I put no advance credit recieved I get the same credit allowed on line 24 using the same 401% income ...

[Critter-3]

This is correct in my professional program ... can anyone look at the TT program to see if it is also working correct ... please post back which lines on the 8962 are not working correctly ...