The American Rescue Plan Act of 2021 - excess premium subsidies for health insurance

[Dougjl]

I began receiving retirement income from an annuity in 2020 that resulted in receiving excess premium subsidies for health insurance. The American Rescue Plan Act of 2021 states that I will not have to pay that excess back. When will TurboTax reflect that change?

[Critter-3 · Accepted solution]

The IRS must first figure this out, post technical specs to the programmers, then they must change the program and test it  AND then the IRS must test and approve the changes BEFORE they can go live in the program.   This all takes time so everyone must be patient while this process happens.  Not even my professional program has this corrected yet  although they hope it will be soon.  Sadly this correction is not as simple as the Unemployment fix that was out in less than a week.   

For  those returns that  have already filed they will be held up until the IRS can process those returns correctly. 

[Dougjl]

Thank you!  I appreciate your help!

[TobyMeister]

Hi Critter-3..... Are we still waiting on the IRS to provide guidance on the Premium Tax Credit Repayment for 2020?

My desktop version of TurboTax installed an update today (Saturday, 4/3/21) and a message implied that the American Rescue Plan - Premium Tax Credit Repayment forgiveness was implemented in today's software update:  "We've already updated your federal return to include the new tax relief and are actively working on changes for each state."

But... TurboTax is still showing that I have to pay back the Premium Tax Credit that I received.

Was the TurboTax "message" wrong about the software being up to date?  Or, is the Premium Tax Credit repayment calculation incorrect?

-Thanks.

[DoninGA]

@TobyMeister The Premium Tax Credit adjustment has not been included in the TurboTax software since the IRS has not provided any guidance at this time.

See this IRS website for their statement - https://www.irs.gov/affordable-care-act/individuals-and-families/the-premium-tax-credit-the-basics

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.

The unemployment compensation exclusion has been included in the TurboTax software across all platforms, online and desktop, on 03/26/2021.

[TobyMeister]

Hi DoninGA.... Thanks for your reply.  That's what I thought, but I wanted to ask the question to be certain.  The TurboTax update message implies that it reflects all of the ARPA changes, but obviously it does not.  Thanks again.  Someone at TurboTax should proof the software update messages before they are posted.  These messages, within the TurboTax software, are not always accurate.

[Critter-3]

My professional program just updated this yesterday so the TT program will probably get this updated in the next couple of weeks ... stay tuned.