When will Turbo Tax support the The American Rescue Plan Act waving of owed ACA tax credits for 2020?

[sabreman]

From Maryland Healthcare Connection.

The American Rescue Plan Act that just passed in Congress includes important details about your 2020 taxes.

If you have not filed your taxes yet

If you owe money because you received too much in tax credits in 2020, you will not have to pay the money back. Repayment of any extra tax credits received in 2020 is forgiven. However, you must still file and reconcile your taxes to qualify. This applies to anyone who owes money back, regardless of income.

It is likely that the IRS, local tax preparers and tax software programs have not yet applied this change to their systems. You may be told you need to repay tax credits you received, even though you do not.

Maryland has extended the state tax deadline to July 15, but the IRS has not changed the federal tax filing deadline of April 15.

[sabreman]

Also what about the extended deadline for Maryland State taxes?

[DavidD66]

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, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov. The IRS strongly urges taxpayers to not 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. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance.

If you’d like to be updated when the information on the new unemployment benefits becomes available, please click on the following link: 

How do I get the new unemployment benefits if I’ve already filed my taxes?

[MaryM428]

Maryland has extended its tax filing and payment deadline to July 15 as it weighs tax changes made by the federal $1.9 trillion stimulus law and the state's own coronavirus relief package enacted last month.

Federal deadline for 2020 is still April 15, 2921.

[sabreman]

Thank you for the reply but I don't see anything about not having to pay owed 2020 ACA Tax Credits.  

[sabreman]

Thank you. Will Turbotax support that extended file date? 

[sabreman]

Does the following apply to my question regarding owed 2020 ACA Tax Credits?

"

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. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance."

[DawnC · Accepted solution]

Yes, we'll support the extended filing date for state returns.  As of now, the federal deadline is still 04/15.   TurboTax is being updated to reflect the changes below, but we don't have a date to give as it is unknown when the changes will be finalized.   The American Rescue Plan makes significant changes to bolster the ACA and improve marketplace access and affordability by:

• Extending ACA subsidies to higher-income people who do not currently qualify for 2021 and 2022;
• Increasing ACA subsidies for lower-income people who already qualify for 2021 and 2022;
• Providing maximal ACA subsidies for individuals that receive unemployment benefits in 2021; and
• Preventing taxpayers who misestimated their income in 2020 from having to repay excess premium tax credits at tax time.

[sabreman]

Thanks!  That is what I was looking for. 

[sabreman]

Has the waving of owed ACA Tax Credits been supported (see below)?  If not when will this happen? 

"

• Preventing taxpayers who misestimated their income in 2020 from having to repay excess premium tax credits at tax time."

[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.

[JRH47]

If I've already filed my taxes and paid in money to reconcile overpaid premium tax credits for previous year, will I be able to amend my taxes to get a refund on that since the ARP Act is waiving that?  Will I receive a corrected 1095-A?

[sabreman]

Has Turbo Tax been updated yet for  The American Rescue Plan Act waving of owed ACA tax credits for 2020?

Thanks!

[MarilynG1 · Accepted solution]

@sabreman  I just tested this in both TTO and Desktop.  The repayment amount was calculated on Form 8962, Line 29; however, it did not carry over to Schedule 2, Line 2, or to Form 1040, Line 17, so was not added to the tax return. 

Go through the 1095-A entry section again.  Type '1095-a' in the Search area, then click on 'Jump to 1095-A'. 

If you have already filed your return, you should not file an amended tax return only to get a refund of this amount.

Click this link for more info from the IRS on the Premium Tax Credit Repayment. 

[mark8]

Looks like Turbo tax software is showing that changes on waiving the owed ACA tax credits.  If we have already filed do we amend our return or just wait for further instruction still.