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Returning Member
posted Mar 28, 2021 5:41:35 AM

Form 8962

If I got married in October 2020 and was on unemployment most of the year and went on my husbands insurance in November why would I need to pay back over 3,300.00 on form 8962?

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3 Replies
Expert Alumni
Mar 28, 2021 6:16:17 AM

When the filing status changes or circumstances change, it is important to immediately notify them of the life change so that the Premium Tax Credit will be calculated properly.

 

***However, there has been a change in the tax law with the American Rescue Plan that may excuse you from any penalty.

 

For now, there is nothing to do but wait because the IRS has not yet released guidance. Therefore, the software cannot yet be updated.

 

For the most recent updates, the IRS advises taxpayers keep checking: IRS Coronavirus Tax Relief.***

 

Without getting an exception, then the Premium Tax Credit will be calculated as if you were married the whole year and had a different level of income throughout the year. See: What is the Premium Tax Credit (Related to health insurance?

 

To do this, return to healthcare.gov or a state Marketplace, wherever you signed up for this coverage.

 

For more information, see:

2020 Form 8962 Instructions

Premium Tax Credit: Claiming the Credit and Reconciling Advance Credit Payments: Reporting Changes in Circumstances

 

Also, the first $10,200 of your unemployment compensation will not be taxed. Your unemployment will be reported on Line 7 of Schedule 1 in full. Then, the new legislation March 11, 2021 allows for a subtraction of that income to be reported on Line 8 of Schedule 1 up to $10,200. 

 

To see whether your state will tax the unemployment compensation, see: How is my state taxing unemployment income?

 

[Edited 04/03/2021 | 10:59 AM PST]

 

@lfrugoli953

Returning Member
Mar 28, 2021 11:00:41 AM

I put all my tax information into Turbo tax and no form shows the $10,200.00. It is showing the full amount of unemployment

 

Employee Tax Expert
Mar 28, 2021 2:00:17 PM

The TurboTax online software is updated to reflect the exclusion of up to $10,200. The update for the desktop programs should be complete by tomorrow (3/29/21). 

 

If you are using the online version, you can confirm it was removed by following the instructions below:

  1. Click on Tax Tools.
  2. Click on Tools.
  3. Click View Tax Summary.
  4. Click on Preview my 1040.
  5. Scroll down to Schedule 1, Part 1. You will see your unemployment on Line 7 and the deduction of up to $10,200 on Line 8.

I have attached a picture below for additional guidance.

 

 

@lfrugoli953