Author Topic: Warning! Tax wrinkle ACA with no APTC  (Read 1619 times)

Exflyboy

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Warning! Tax wrinkle ACA with no APTC
« on: March 11, 2023, 01:07:37 PM »
So I got the dreaded "enquiry" letter from the IRS (while they sit on my return for another 6 to 8 weeks!).

I got my 1095-A statement from the Healthcare Marketplace. Which showed my Second lowest cost Silver premium to be $zero.

Obviously you can't buy such a plan for $zero (at least not in the USA). So the instructions say to use the online tool at the HC marketplace to calculate the real number and use that to complete form 8962. Which is what I did.

I.e followed the instructions exactly! But of course form 1095-A is sent to the IRS from the HC marketplace and does not match the calculated number ($1939) so the computer barfs on the return.

So after 3 weeks they send you a letter and now you dear taxpayer have to jump through hoops.. AKA, doing THEIR job for them!

I then call the marketplace and ask for a corrected 1095-A.. "We're not going to send you one, and.. We don't give tax advice so go away and talk to a tax professional!"

Slightly pissed off I wade through the instructions... Turns out I did everything correctly but if you are stupid enough to not take an advance of the premium tax credit they will put $zero in the cost of SLCSP.. I.e column 33b... Because y'know that makes PERFECT sense!

You would think I knew better to not get my crystal ball out and KNOW this would send me off on a wild goose chase while the IRS holds onto MY money!

Anyway, if you did not take an advance of the tax credit you dear tax payer will have your return thrown onto the "duh" pile. I would imagine this will cause several thousand returns to be rejected.

So I sent everything off including the 1095-a they asked for plus screen shots of the online tool showing how I came up with the real number.. God knows if this will be enough to generate some common sense, but if I end up in the back of a black Suburban this will be the last you'll hear from me..:)

MustacheAndaHalf

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #1 on: March 11, 2023, 05:11:58 PM »
..., but if I end up in the back of a black Suburban this will be the last you'll hear from me..:)
Bullet proof black suburban sounds more like the secret service :)

I recall reading a book about the experience of an IRS agent who worked for their Criminal Investigation Division (CID).  Most of the time, this guy was seizing assets (like taking a taxpayer's car).  I learned from that book if two IRS agents show up at your door without prior notice, you need to say nothing and call an attorney immediately, because those are likely CID agents.

Exflyboy

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #2 on: March 11, 2023, 05:21:36 PM »
Good to know, but hopefully the "crime" of educating the IRS on their own process won't rise to the level of being turfed out of my house..:)

Sibley

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #3 on: March 11, 2023, 08:19:48 PM »
Want another stupid thing? Parent's Indiana return got rejected. Why? Because one of the 1099-Rs had federal tax withholding and state tax withholding of $250 each. Indiana will not accept a return with identical amounts withheld on a 1099. The fix is to change one of the amounts by a dollar.

Exflyboy

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #4 on: March 11, 2023, 08:37:52 PM »
Want another stupid thing? Parent's Indiana return got rejected. Why? Because one of the 1099-Rs had federal tax withholding and state tax withholding of $250 each. Indiana will not accept a return with identical amounts withheld on a 1099. The fix is to change one of the amounts by a dollar.

Oh FFS! This stuff would be funny.. If it happens to somebody else!

green2bend

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #5 on: March 12, 2023, 02:10:13 PM »
Did you run into this last year? I'm also eligible for ACA subsidies but did not get them in advance. This is the second year in a row that I will file this way. When I filed for 2021 taxes last year, I had no problems submitting the numbers from the website even though the form had it at $0. I haven't filed yet for 2022, hopefully I don't run into the same problem as you.

Exflyboy

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #6 on: March 12, 2023, 02:29:33 PM »
Did you run into this last year? I'm also eligible for ACA subsidies but did not get them in advance. This is the second year in a row that I will file this way. When I filed for 2021 taxes last year, I had no problems submitting the numbers from the website even though the form had it at $0. I haven't filed yet for 2022, hopefully I don't run into the same problem as you.

No, in 2021 I took the advanced subsidy so had the correct amount on the 1095-a in column b.

I am assuming this is what the issue is. The IRS simply said to send my copy of the 1095-a as it did not match what they had on file.. The only difference I could see is that I put the calculated value on my 8962 which of course does not match the 1095a.

Not impossible there is some other problem but thats the only glaring difference. The other thing to is that the IRS has no way of knowing what the calculated value is.. Unless they go onto the tool and put in our information.

I have sent them the data I inputted and the subsequent result so hopefully that will resolve the issue.

dandarc

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #7 on: March 12, 2023, 02:33:27 PM »
https://www.healthcare.gov/tax-tool/#/

Common enough problem that they have a tool for it. I input the results from here in to Turbotax - refund was deposited as scheduled without issue. 2nd year in a row doing that (never qualified for the credits before 2021 tax year).

Is your state on the national marketplace or have its own exchange?

Exflyboy

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #8 on: March 12, 2023, 03:05:26 PM »
Oregon uses the Federal marketplace.

I used "Onlinetaxes.com". You simply enter the info and it spits out the 8962.. But there is nothing on the form that indicates I used the calculated value.. So seems strange my return got spat out but others went through????

Exflyboy

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #9 on: March 12, 2023, 03:26:29 PM »
I should also point out that the rejection letter from the IRS says,

"The amounts you reported on Form 8962, Premium tax credits, Part 11, Columns (a)- enrollment premiums, (b) applicable second lowest cost silver plan premium, or (f) advance payment of PTC, don't match the info we have on file we have from the Health Insurance Marketplace.. Please send us a copy of your form 1095a

So they are specifically looking at the numbers in the Part 11 table.. I only had mkt place coverage for December so only line 23 is filled out.

So line 23 is EXACTLY as my 1095a .. he only difference is my 1095 says $zero in column b.

As the IRS is specifically pointing at these numbers then the only difference can be the calculated value for the SLCSP.. Which I got from the on line tool.

Go figure!

Exflyboy

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #10 on: March 31, 2023, 01:05:46 PM »
Just an update on how my case was resolved.

I sent the IRS the worksheets from my online "how to calculate the SLCSP" tool and the refund was approved as I submitted it.

I'm assuming the there must be a glitch in the programming that rejected mine first time round.

All good now.


stoaX

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Re: Warning! Tax wrinkle ACA with no APTC
« Reply #11 on: March 31, 2023, 01:23:44 PM »
Just an update on how my case was resolved.

I sent the IRS the worksheets from my online "how to calculate the SLCSP" tool and the refund was approved as I submitted it.

I'm assuming the there must be a glitch in the programming that rejected mine first time round.

All good now.

Glad to hear it finally worked out.  And thanks to you I know to always take the subsidy straight away.