It said I have to pay back $402 from my tax credit FOrm 1095A. It didnot add the figure to the total tax due at the top of the page Why?

[KatrinaB48]

Good news! The 2017 Tax Cuts and Jobs Act (also known as tax reform) eliminated the Affordable Care Act penalty on federal tax returns. However, some states and jurisdictions will continue to assess their own penalty—specifically New Jersey, Massachusetts, and the District of Columbia. If you live in one of these states, contact your Department of Revenue for more information about ways you can avoid paying the health insurance penalty.

[Jackson4]

You don't answer the question. It said I have to repay $402 from my 1095A forms. It did not add the $402 to the total tax due at the top of Turbotax online Why?

[DoninGA]

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@Jackson4 wrote:

You don't answer the question. It said I have to repay $402 from my 1095A forms. It did not add the $402 to the total tax due at the top of Turbotax online Why?

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Look at your tax return Form 1040 and Schedule 2.  If you had a repayment of the Premium Tax Credit it will be on Schedule 2 Line 2.  This amount flow to Form 1040 Line 12b as a tax liability.  It will either decrease your tax refund or increase your taxes owed.

[soewinone]

I have to pay back over $8000 after I filled up 1095-A. I am frightened very much. Is that something wrong with TuboTax? My wife withdrew 50k from her 401k because it was allowed for Covid-19 without penalty. Please help.

[MarilynG1]

@soewinone  No, nothing is wrong with TurboTax.  If your income is more at tax time than you reported it would be when you signed up for Marketplace insurance, normally you would have to pay back the excess amount of Advance Premium Credit you received, shown on your 1095-A. 

Since your wife took a 50K Retirement Distribution, your income would be much higher than you reported to the Marketplace, which is why Form 8972 calculates a credit repayment of $8,000 for you. 

However, the newly passed American Rescue Plan is waiving the Repayment of Advance Premium Credit, so you will not have to repay your excess credit.  

Look at your tax return Form 1040 and Schedule 2.  If you had a repayment of the Premium Tax Credit it will be on Schedule 2 Line 2.  This amount flow to Form 1040 Line 12b as a tax liability. 

Also, for your wife's Retirement Distribution, make sure you indicated that her retirement distribution was 'covid-related' when entering her 1099-R, so that you are not assessed a 10% Penalty for Early Withdrawal. 

You have the option to report the entire distribution this year, or spread the income reported over three years.  You will see this in TurboTax towards the end of the section, by NOT checking the box to 'report all the income this year'.  

Click this link for details on the American Rescue Plan.

[soewinone]

@MarilynG1 Thank you very much. You reply is very professional and covers all the important points. I can solve the problem with your help.

[thaliaag]

Hi @MarilynG1 

I have an excess repayment of $1350 and the system isn't waiving it for me. I called a tax expert and it sounds like they don't even know what I'm talking about or how to handle. How do I adjust this in the system?

[Cynthiad66]

TurboTax is depending on the IRS for updates for when, as well. It is very likely the updates will be in place before April 15, 2021. The TurboTax engineers are working as fast as possible to update the software with the changes.

At IRS: Premium Tax Credit: Claiming the Credit and Reconciling Advance Credit Payments

Check Back for Updates to this Page

We’re reviewing the tax provisions of the American Rescue Plan Act of 2021, signed into law on March 11, 2021. Taxpayers who filed a 2020 tax return and reported an excess advance premium tax credit repayment on Line 29 of Form 8962, Premium Tax Credit, should not file an amended tax return only to get a refund of this amount. The IRS will provide more details soon. For the latest updates, check IRS.gov/coronavirus.  Per@KathrynG3

The Plan also relieves eligible taxpayers of having to pay back any excess advance premium tax credit they took. If you used any credit to lower your monthly health insurance payment when you applied for coverage in the Health Insurance Marketplace®, you might not have to pay it back under the new law.

When you enter your 1095-A in TurboTax, we’ll determine your eligibility whether or not you have to pay back any amount.