For individuals and families who may have already repaid the federal excess Premium Tax Credit, the IRS is advising not to file an amended return to recoup the money paid on their federal tax return. The American Rescue Plan included a repayment holiday for excess premium tax credit paid on behalf of marketplace enrollees for the 2020 tax year. The IRS is taking steps to reimburse taxpayers who filed Form 8962, reported, and paid an excess advance Premium Tax Credit repayment amount with their 2020 tax return before the recent changes made by the American Rescue Plan Act of 2021. Editor’s note: This article has been updated to reflect updates to the Premium Tax Credit from the American Rescue Plan Act of 2021. The American Rescue Plan Act of 2021 suspends the requirement that taxpayers increase their tax liability by all or a portion of their excess advance payments of the Premium Tax Credit (excess APTC) for tax year 2020. Premium Tax Credits excess repayment for 2020 in the American Rescue Plan @jimgarrison wrote: I just download an update and the ACA excess premium tax credits on Form 8692 that were previously being paid back have now disappeared and my refund has gone up. The American Rescue Plan waives the repayment, but only for the 2020 tax year. The premium tax credit helps make your health insurance premiums more affordable. American Rescue Plan of 2021 suspends the repayment of federal excess premium tax credits for health insurance. The provision applies to taxpayers who file a 2020 income tax return and reconcile any advance payment of the credit. When you file your 2020 taxes, be aware this is a one-time suspending of payment. I have two returns where the excess premium credit repayment amount (Form 8962) still appears on the return. Put simply, you won’t owe the IRS anything if you received more PTC that you were eligible for. Premium tax … Premium Tax Credit – Sec. The American Rescue Plan Act of 2021 added IRC §36B(f)(2)(B)(iii) that provided that taxpayers are not required in tax year 2020 to repay advance premium tax credits received in excess of the premium tax credit they actually qualified for. You only need to include an 8962 if you are getting a refund of premium tax credit. In IR-2021-84 [1] the IRS described the procedures that tax As I understand the American Rescue Plan, Act one of its components suspends tax liability for 2020 when advance payment exceeds the allowed Premium Tax Credit, regardless of income level. You’ll receive it as an advance credit or claim it as a refundable credit … We’re reviewing the tax provisions of the American Rescue Plan Act of 2021, signed into law on March 11, 2021. A taxpayer’s excess APTC is the amount by which the taxpayer’s advance payments of the Premium Tax Credit (APTC) exceed his or her Premium Tax Credit … Taxpayers who filed a 2020 tax return and reported an excess advance premium tax credit repayment on Line 29 of Form 8962, Premium Tax Credit, should not file an amended tax return only to get a refund of this amount. No! 9662 removes the requirement that excess advance payments are treated as an additional tax liability on the individual’s income tax return for the taxable year. Premium Tax Credits excess repayment for 2020 in the American Rescue Plan The part of your post extracted below is the part of the tax law that has been waived. The American Rescue Plan, signed into law on March 11, 2021, includes a provision that eliminates the requirement to repay excess advance premium tax credits for tax year 2020. The IRS will process tax returns without Form 8962 for tax year 2020 by reducing the excess advance premium tax credit repayment amount to zero." Individuals in this situation should not file an amended return solely to get a refund of this amount. Please note that the refund for the Excess Premium Tax Credit may be issued as a separate refund from the IRS and not included in your original refund.
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