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Level 2

Solved

TT 2021 Form 8962 - Error calculating repayment limitation?

Forum|Forum|4 years ago
January 20, 2022
29 replies
2 views

Form 8962 was released today and there appears to be a glitch with how TurboTax is calculating the premium tax credit repayment. My household income as a percentage of the federal poverty line was greater than 400% (line 5). However, line 28 stills shows the repayment limit set as $2,700. It is my understanding that limit does not apply when MAGI % FPL is over 400. According to the IRS instructions line 28 should be left blank and you should be required to repay the full amount shown on line 27. Is anyone else experiencing this problem? I'm hoping someone will tell me that I misread the instructions and that I only owe $2,700! 😀

TurboTax Premier Online

Best answer by BillM223

Forgot to mention, I'm using Turbo Tax Deluxe. So appears this flaw spans multiple products which one would expect for consistency. 🙂

Thank you (all) for reporting this issue; we will be investigating it.

GeorgeM777

Level 11

There could be an error in your wages and income entries. As you indicated in your question, the obligation to repay part or all of the advanced premium tax credit is determined on how your household income compares on a percentage basis to the federal poverty line. According to the IRS, if the amount on line 5 of Form 8962 is "at least 300 but less than 400," then the amount on line 28, for any filing status other than single, will be $2,700. Because your return is currently showing an obligation to repay $2,700, it would appear that your household income is falling somewhere between 300% and 400% of the federal poverty line, which as you noted is not correct because your income is greater than 400% of the federal poverty line.

In the Wages & Income section of TurboTax, please verify that your income entries are correct and make whatever changes are appropriate. Additionally, under the Affordable Care Act, your health insurance cannot exceed 8.5% of your household income regardless of your income level. You are entitled to a premium tax credit to the extent the cost of the benchmark silver plan in your area exceeds 8.5% of your household income. If you received an advanced premium credit amount in excess of what you were eligible to receive, then you likely have to repay that excess amount.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

smsazAuthor

Level 2

Thanks, George. I did confirm that my income is reflected correctly in the system. Line 5 on form 8962 shows an amount greater than 400. That should trigger line 28 to be blank based on what is written in the IRS instructions. "Leave line 28 blank and enter the amount from line 27 on line 29 if any of the following situations apply to you: Your entry on Form 8962, line 5, is 400 or more." It still appears that TurboTax has a glitch in the form they just released.

dk82

Level 3

Yes, I've experienced the same error. Posted about it here but no acknowledgement yet. My repayment limitation is listed as $1350 (which would the correct value for 300-400% FPL) despite my AGI being six-figure (well above the 400% FPL limit) and total subsidy being $4972. I've double-checked and even re-entered the income and 1095-A values. Also verified that this is not simply a TurboTax display issue -- the tax due is truly being calculated with the $1350 (or in your case filing jointly, I assume, $2700) value. Discussed with the IRS and they agree with my interpretation so seems to be nothing to do but wait for a TurboTax fix or file elsewhere.

smsazAuthor

Level 2

I'm sure they will get it fixed. Lots of people will soon be reporting this error. I only wish the TT calculation was correct!

smsazAuthor

Level 2

Thank you (all) for reporting this issue; we will be investigating it.

Any further update on when this will be fixed?

PSM1

Level 2

Hello. I just submitted a question with the same situation. I am showing a $2700 limitation, when I think I am really supposed to repay all the advanced premium tax credits.

Johnnat

Level 2

I have the exact same problem. Thought the law changed but cant find anything

GeorgeM777

Level 11

Additional review appears warranted. In this regard, below are instructions on how to obtain a token number which can be used to retrieve a copy of your tax return for further review. The retrieved return will not contain any of your personal information as such information is deleted before review takes place (the return you have prepared will still contain all of the information you entered as deletion of personal identifiable information only happens when TurboTax retrieves its copy of your return for review).

Here are the instructions on how to obtain a token number whether you are using TurboTax Online or the TurboTax Desktop/Download version.

TurboTax Online:

Sign into your online account.
Locate the Tax Tools on the left-hand side of the screen.
A drop-down will appear. Select Tools
On the pop-up screen, click on “Share my file with agent.”
This will generate a message that a diagnostic file gets sanitized and transmitted to us.
Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

Open your return.
Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent”
This will generate a message that a diagnostic copy will be created. Click on OK and the tax file will be sanitized and transmitted to us.
Please provide the Token Number that was generated in the response.

As a reminder, in any follow-up response do not provide any personal identifiable information.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

smsazAuthor

Level 2

898946

JPeterO

Level 2

I'm seeing the same issue. When I ran TT in early January, it did calculate the correct repayment amount (my income is over 400% of the FPL) and so had a $0 repayment limit (meaning I had to repay all the amount shown on line 27. It appears that one of the updates since early January caused this bug.

If you see table 5 in the 2021 Form 8962 instructions, it is clear that if your percentage of the FPL is over 400 you have no repayment limitation (and thus must repay the entire amount of your excess APTC).

drj5mn

Level 2

As of 1/27/22 updates, the issue with 8962 is still not corrected. I too am still getting a limitation of $2700 when my income is calculated as 401% of poverty level and I should not have a limitation at all and should pay all of the credit back.

In my view, this unresponsiveness by Intuit to a very fundamental problem is unacceptable. I have been using the program for decades and have resisted leaving them despite other episodes of corporate misbehavior. Now, however, there is a problem with overall bugginess and a feckless response to a very basic problem. Their reliability is now deeply in question.

alsn

Level 5

I have the same issue with TurboTax Desktop (Windows). My MAGI is more than 400% but the repayment amount is limited to $2,700. Do I need to create a new issue for desktop?

Ypressley

Level 2

Mine rejected a second time after verifying it was correct. Any update on a resolution? Is the issue only with TurboTax?

Linwea21

Level 2

Hello I had this same issue I was just notified that mine were rejected and when I went to fix my error this is the message that popped up for me “This return cannot be electronically filed at this
time due to a processing error that will be
corrected on February 3, 2022. On or after
February 3, 2022 open the rejected return, review it
for errors, and resubmit the return for electronic
filing.” ……… I hope this helps.

smsazAuthor

Level 2

It has now been more than a week since this issue was first reported. It is still not fixed and it appears that people who did not spot this error are now having their submitted returns rejected by the IRS. It seems hard to believe that this would take more than 5 minutes for a programmer to correct. It appears to be just a matter of coding some simple IF-THEN logic. When can we expect a fix to be implemented?