For tax years 2021 and 2022 only, taxpayers with household income that exceeds 400% of the federal poverty line for their family size may be allowed a PTC!!
In 2020 ONLY
Repayment was forgiven
If someone has a repayment because income is high, things to consider:
*What if they made an IRA contribution?
These can provide adjustments to income --lowering income and possibly reducing repayment (contributions must be made by tax filing deadline) **do a test run in the system and see if it helps before sending client out to make a contribution
You might be wondering why Marketplace Health Insurance needs to be reported on the tax return when others don't. This is what I tell my clients(all of which get subsidy IF they have Marketplace):
Marketplace is subsidized health insurance, that means the government pays a part of it. Let me give you an example of how it works. I call up Marketplace in Nov/Dec and say I need health insurance. They ask me where I live, how old I am, what policy I want, and how much I THINK I am going to make NEXT year. No one really knows EXACTLY how much they will make in the upcoming, but let's say I project $30,000. Marketplace might say, well the policy you choose is $500 a month, based on your income you can afford to pay $100 a month, and Marketplace will pay the rest (that is called subsidy). Well, no one knows exactly what they are going to make, which is why the 2 get reconciled on a tax return--that is when we learn what you really made for the year and compare it with how much subsidy you received.
This table below is in Section H of the PUB 4012
**Need A Form 8962? **Working on 2021...
If a client calls saying they filed their tax return elsewhere but received a letter from the IRS stating they need to send in a 1095A and the Form 8962, you can use this Excel Spreadsheet to generate a Form 8962 without having to recreate the tax return. All you need is the 1040 and the 1095A.
Download and Complete all fields in Blue.
(Not for Alaska, Hawaii, Those illegally present in U.S. who have a policy, or Allocation of Policy)
Click on the image to download the Excel file. I have one for 2018 and one for 2019
After I print the 8962, I fax it with the 1095A and Page 2 & 3 of the IRS letter (the one that has the blanks for Taxpayer name, number, number of pages, etc) I use that as the Fax Cover page!
All my clients have had the fax #855-309-9361 associated with their letter, so that is where I fax them all.
Per an IRS rep at that department, it takes about ten (10) days for show in the system that they have received the fax, and up to 16 weeks to process once they receive it. I warn my clients about this because it is a long process and they think once we fax it, it is a quick turn around.
Best # to call 1-866-682-7451 x 568 # is for my Florida clients
This department ROCKS!!!!!!
Quick to answer and VERY VERY HELPFUL!!!!
I recommend the client call 10 days after its faxed just to make sure they received the fax on their end, since it is a long process (I had one out of over 30 that said it went through on my end, but they said they never received--so better safe than sorry)
From Prosperity Now's TON's VITA Train --check out Module 9 for information on Affordable Care Act
ACA Affordable Care Act Important Information!!!
Please review this excellent handout to make sure you are not accidentally forcing a repayment of subsidy--it's all in how you answer these 2 questions. (Created by: A project of the Center on Budget and Policy Priorities)
Review this or add to your PUB 4012 -- Marketplace change for TY2021--Unemployment & Marketplace-Click Image
Below is older one--keeping for explanation and possible use for TY2022
Marketplace & Self-Employment
If someone is self-employed and purchasing their own health insurance (since they don’t have an employer or don’t qualify for Medicare or other source) they can generally use part of what they spent on the premiums as an expense on the Schedule C See PUB 4012 PAGE E-5. The adjustment carries over to the Schedule 1 Line 17, which carried over to the Form 1040 Line 10—to reduce income before tax is calculated. Which is great!
With Marketplace, because their insurance is subsidized, and the client may not have been entitled to all of the subsidy they received or may have received less subsidy than entitled too, the IRS has said for VITA and TCE programs, that this out of scope (OOS) for VITA/TCE. The client I see has 3 options:
Marketplace Tips for
VITA Volunteers & Clients
No 1095A at appointment time? You can't complete a tax return if the client has Marketplace but doesn't have their form, but we don't send them away, Here is what we do:
**Please note, a hand written 1095A is not acceptable when answering the IRS notice requesting an omitted Form 8962 and 1095A. You must send the printed copy you receive from Marketplace or download from the Marketplace account page.
From IRS: Additional information. For additional information about the tax provisions of the Affordable Care Act (ACA), including the individual shared responsibility provisions, the premium tax credit, and the employer shared responsibility provisions, see www.irs.gov/AffordableCare-Act/Individuals-and-Families or call the IRS Healthcare Hotline for ACA questions (1-800-919-0452). I just found this number--never called it--but a good resource to have.
Beyond the Basics-Health Reform is another great project by the Center on Budget and Policy Priorities that have very helpful resources.
You can contact me at email@example.com
Please note: I, Mary Meador, AM NOT a certified accountant or tax law expert. I volunteer with VITA providing free tax preparation for individuals and families whose income is less than $66,000 a year. We deal with simple returns at our sites. I cannot guarantee the accuracy of all the information on this site as tax laws change and I may not have a clear understanding of complicated issues. I am trying to provide basic tax preparation information for our volunteers to get started--remember Publication 4012 is your go-to resource for questions, as well as irs.gov and Publication 17.