Reviewed our Taxes in IRS FreeFile (TurboTax) and our Payment Went Down!!!!

[ShokWaveRider]

Only last month when I reviewed this we owed $2800 (Most likely underpayment of ACA premiums). Today I went to look and review them now we only owe $1200!!!

Are the new ACA rules retroactive and apply to 2020 Taxes.

I must admit I am confused.

 

[SecondCor521]

There are two provisions in the American Rescue Plan Act passed about a month ago which were retroactive to 2020. One had to do with unemployment income, the other had to do with the ACA. Since you mentioned the ACA but not UI, I'll just explain that one.

Normally if you received too much in APTC, then you'd have to repay the excess on your tax return. ARPA contained a provision that for 2020 this repayment was completely forgiven.

To see if this is the case for you, take a look at Part III of your Form 8962. If there's a ~$1600 amount on line 27 but the amount on line 29 (or Schedule 2 line 2) is zero, then that's what happened.

And yeah, you're not the only confused taxpayer around given the number of changes in tax law over the past year or so.

 

[ShokWaveRider]

Thanks, unfortunately the IRS Freefile does not let you see the complete form. Or at least I cannot find it. It does say the amount that was paid to the insurance company and the amount I was allowed, but the difference there is $2115 not $1600.

Still confused. I am only concerned because I do not want to pay less than I owe as it may generate an audit or

But the TTAX Freefile says I owe less than last month. So I guess they now have the updated forms. So Ces't La Vie. I should probably be thankful for small mercies.

 

[bobandsherry]

Only last month when I reviewed this we owed $2800 (Most likely underpayment of ACA premiums). Today I went to look and review them now we only owe $1200!!!



Are the new ACA rules retroactive and apply to 2020 Taxes.



I must admit I am confused.

As mentioned, any subsidy premium repayment that was originally required is forgiven for 2020 filing. That was part of the last $1.9T Cares package. If concerned maybe drop the $20 for HR Block tax program where you can see more details?

Also if you weren't aware the subsidy cliff was removed for next 2 years.

 

[SecondCor521]

There must be a way in whatever IRS free file option you're using to see the return itself. I don't know what it is, but all programs I am aware of provide that.

But I'm pretty sure I know what is going on anyway.

When you did your taxes before, you received $2,115 too much in APTC. However, because your income was between 200% and 300% of the FPL for your family size and location, you only were required to repay $1,600 of that due to the repayment limitation (see the instructions for Form 8962 line 28 and the associated table 5 on page 16 of https://www.irs.gov/pub/irs-pdf/i8962.pdf).

Then the law changed due to ARPA, and you didn't even have to repay the $1,600. That's the difference you're seeing.

Does the program you're using tell you your AGI? If so, you can probably take that number and see if it is between 2x and 3x the FPL for your family size and location for 2020. See this link:

https://thefinancebuff.com/federal-poverty-levels-for-obamacare.html

For example, if you lived in the continental United States (which it appears you do) and had a family size of 2, then you'd use the $16,910 number, and your AGI was probably between 2 * $16,910 and 3 * $16,910, whatever that math turns out to be.

 

[ShokWaveRider]

I think I will download the form and fill it out manually. But I guess that is what it is. We always under estimate our income for AGA purposes and make up the shortfall every year. Except 2020 I guess, I guess we made out good this year. Unless they decide they want it back in 2021.