When will TT adjust programming for "waiver of repayment of Advanced Premium Tax Credit" for 2020 returns?

[bomo817]

American Rescue Plan allows for waiver of PTC repayments - TT program is still not adjusting for this - when will TT correct this issue?

[JohnB5677]

If you've filed your return, do not do anything yet. 

If you haven't filed you should hold off.  The software updates should be coming out soon.

The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of economic impact payments, including the unemployment benefit will be forthcoming.

The IRS strongly urges taxpayers not to file amended returns related to the new legislative provisions or take other unnecessary steps at this time. The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable.

TurboTax is developing the software required to process all of the new conditions.

[bomo817 · Accepted solution]

This post is pretty much OLD news...as the ARP has been passed, stimulus payments are underway, and IRS has issued guidance about both the $10,200 UI exemption, as well as the waiver of PTC repayments.  Also, it should be noted that the TT online version has already incorporated programming to handle the $10,200 UI exemption, as it is working on my return.  However, nothing is in place yet to properly report the PTC waiver - and TT "online experts" cannot advise when this will be done.  Once again, TT appears to be playing "catch-up" and further delaying clients from completing their tax return filings.  The only commitment I have received from TT on this issue is "I will receive an email when the program is updated."

[bomo817]

Looking for updates on the TT programming for the APTC waiver,,,does anyone in this Community know when we'll be able to file a Federal return that will waive the repayment?

[Butters2020]

Looking for the answer to that too. TT desktop received an update today that removed the notice about waiting for further guidance from the IRS, but it is still showing that I owe a scary amount of claw-back for the APTC.

[BillM223]

It is not possible to make instant updates to tax software just because Congress has passed this or that law. This is for a variety of reasons:

The first reason is that we have to wait for guidance from the IRS on how the IRS is going to implement these changes. 

For example, the law says that the repayment of excess Premium Tax Credit is waived for 2020. You might think that this is clear, but what about the collateral issues?

Self-employed taxpayers who have to repay excess PTC can apply that to the Self-employed Health insurance deduction. Will that still be true when the taxpayer doesn't have to repay the excess PTC? Congress didn't say so the IRS has to decide. Furthermore, the Self-employed health insurance deduction and the Self-employed SEP, SIMPLE, and qualified plans deduction have peculiar interactions where the value of one affects the other. Will this change? Again, Congress does not say so the IRS has to consider all the possibilities and issued rules on how we are to proceed.

The IRS has also said that they are considering automatically calculating the difference in tax for taxpayers who have receive unemployment compensation and sending out refund checks, and have implied that they might do the same for the excess PTC issue. So they have asked taxpayers to wait and not amend their returns until the IRS decides what it is going to do.

This, too, will affect TurboTax's response: to amend or not to amend?

Even when TurboTax receives the guidance that hasn't come yet, there is still work to do. 

• TurboTax has to read and understand the guidance and design a response.
• TurboTax has to code the underlying code
• TurboTax has to design and create the screen for the interviews
• TurboTax has to design the changes to PDF forms (if any) and to the XML forms that are e-filed
• These changes have to be approved by the IRS
• TurboTax has to create test cases to test the changes
• TurboTax has to create regression tests to make sure that the changes did not break something else
• TurboTax has to create documentation for internal and external audiences
• TurboTax has to package the changes so that they can be rolled out to Online servers and to CD/download software users

In short, you and we will have to wait until the IRS issues guidance on how these tax law changes are meant to be interpreted and implemented - and this will take time. 

Normally, tax laws changes are finished before December 31st, but this has been a year of "moving the goalposts" on practically a daily basis. It is very difficult to plan anything when the Congress, the IRS, or the states change the rules on the fly.

Give the process a chance - when TurboTax knows something, then you will know something shortly thereafter as TurboTax works through the steps I listed above.

[BillM223]

It is not possible to make instant updates to tax software just because Congress has passed this or that law. This is for a variety of reasons:

The first reason is that we have to wait for guidance from the IRS on how the IRS is going to implement these changes. 

For example, the law says that the repayment of excess Premium Tax Credit is waived for 2020. You might think that this is clear, but what about the collateral issues?

Self-employed taxpayers who have to repay excess PTC can apply that to the Self-employed Health insurance deduction. Will that still be true when the taxpayer doesn't have to repay the excess PTC? Congress didn't say so the IRS has to decide. Furthermore, the Self-employed health insurance deduction and the Self-employed SEP, SIMPLE, and qualified plans deduction have peculiar interactions where the value of one affects the other. Will this change? Again, Congress does not say so the IRS has to consider all the possibilities and issued rules on how we are to proceed.

The IRS has also said that they are considering automatically calculating the difference in tax for taxpayers who have receive unemployment compensation and sending out refund checks, and have implied that they might do the same for the excess PTC issue. So they have asked taxpayers to wait and not amend their returns until the IRS decides what it is going to do.

This, too, will affect TurboTax's response: to amend or not to amend?

Even when TurboTax receives the guidance that hasn't come yet, there is still work to do. 

• TurboTax has to read and understand the guidance and design a response.
• TurboTax has to code the underlying code
• TurboTax has to design and create the screen for the interviews
• TurboTax has to design the changes to PDF forms (if any) and to the XML forms that are e-filed
• These changes have to be approved by the IRS
• TurboTax has to create test cases to test the changes
• TurboTax has to create regression tests to make sure that the changes did not break something else
• TurboTax has to create documentation for internal and external audiences
• TurboTax has to package the changes so that they can be rolled out to Online servers and to CD/download software users

In short, you and we will have to wait until the IRS issues guidance on how these tax law changes are meant to be interpreted and implemented - and this will take time. 

Normally, tax laws changes are finished before December 31st, but this has been a year of "moving the goalposts" on practically a daily basis. It is very difficult to plan anything when the Congress, the IRS, or the states change the rules on the fly.

Give the process a chance - when TurboTax knows something, then you will know something shortly thereafter as TurboTax works through the steps I listed above.

[Butters2020]

Understood. TT should not have removed the notice about waiting for updates pending IRS guidance. By removing that notice, they have created more confusion and stress for their customers. A simple "Hold tight - we're still working on it" would go a long way.

[bomo817]

While it's certainly understandable that TT must complete many programming changes due to the IRS (and Congress) "moving the goalposts", the consumers that rely upon the Intuit corporation should be given accurate, timely, and meaningful information.  Relying upon a "chat room conversation" to provide this important information is not the way to do business, or retain clients.  For instance, I just now received an email that the UI exemption has been incorporated into the TT online version - while I knew this over one week ago when I signed back into TT and looked at my return and it reflected the $10,200 exemption amount.  To me, it appears the right hand doesn't know what the left hand is doing...???

[usbbd50]

How do I get on an email list so that I know when this has been corrected in the TT CD version that I have?

Thanks, 

[bomo817]

Good Luck with that - TT has been dragging their feet again, only posting 2 options: (1) hold off filing until TT corrects their programming or (2) proceed with filing and reconcile with IRS (and State, if applicable) at a later date.  I am waiting for updates to the Online version in order to get my refund of over $26K!  The last update I received was from one of the online Tax Experts, telling me that the changes were expected by end of March...but they never did state what YEAR it would be!  My overall prediction is that HR Block, or Hewitt, or one of many other tax professionals/firms will be seeing an uptick in their client base next year.

[usbbd50]

Imagine the IRS right now. They have been underfunded for a very long time. If you are going to create very very complex ways to skirt paying taxes by rich people, you need to fund the IRS to audit. I imagine there is one elderly woman in the basement of a bank in Philadelphia who is the one person, with a green eyeshade on, who is doing ALL of the research for the IRS right now. Honestly, they recently said they cannot even begin to audit complex returns which is why the semi-poor are the ones getting the audits. Good luck to you. I'm happy with 
Turbo Tax. But that's me, I actually read the congressional bills and understand what it takes to update software. 

[APS2]

I just open my Turbo Tax software for 2020 about 1 hour ago. There were updates and when I opened the tax return, the PTC has been fixed. All they did was eliminate the amount from Schedule 2.

Has anyone seen this yet?

[usbbd50]

Thanks. Looks like this is now updated. It's a little strange that form 8962 still shows that you are supposed to put it on line 17 / Schedule 2 ... on the 1040 but the program no longer puts it there. I'm waiting a bit longer to see if there is actually another line put on form 8962 to make it zero for 2020. Thanks again. 

[DawnC]

Form 8962 is not going to be changed.   The program is updated to not put the repayment amount on Schedule 2, which is how the IRS has dictated that the legislation be handled.  @usbbd50

Please see today's IRS release that explains - ''The Internal Revenue Service announced today that taxpayers with excess APTC for 2020 are not required to file Form 8962, Premium Tax Credit, or report an excess advance Premium Tax Credit repayment on their 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, when they file.''    The 8962 will not be sent to the IRS with your tax return.  As long as the amount is not included on Schedule 2 or on Line 17 of Form 1040, you can safely file.