PTC to be repaid - so what happens to Sch A?

[Catherine]

Client got marketplace coverage and a whopping $300 in advance PTC.  However, family income hits 401% of poverty level so the whole $300 will get paid back (added to his taxes for 2016). So far, so good.  Or at least comprehensible.  Client is working for a small employer that does NOT offer health insurance.  

How much of the premiums he paid out-of-pocket can I deduct on Schedule A?  The entire amount, or do I have to adjust by $300 for the premium tax credit that he will be paying back?  If the latter, do I have to remember that $300 to add to 2017 insurance costs?  I've researched and found all kinds of info on self-employed and semi-retired and on and on but nothing that pertains to this situation.  

[jklcpa]

If I remember correctly, Drake will adjust this for you and will use the net amount of premiums minus the PTC actually allowed and report that on Sch A. In other words, the deduction on Sch A for 2016 will take into account the amount of the payback that occurs in 2017. Drake is handling the Sch A as if the TP received the exact correct amount of PTC from the Form 8962 without additional credit or payback.  Last one I had, Drake did create a backup worksheet that listed what the Sch A deduction was comprised of.  Hope that all makes sense.

[Catherine]

Thanks, Judy.  That helps a lot.

The other twist is that what he paid is NOT what's on the 1095-A, so I have to make that correction as well.  

[jklcpa]

2 hours ago, Catherine said:

Thanks, Judy.  That helps a lot.

The other twist is that what he paid is NOT what's on the 1095-A, so I have to make that correction as well.  

I've seen some that showed a level premium for all 12 months that did add up to the total amount paid, within pennies each month, even though the actual payment for Jan was the prior year's rate and then adjusted for the over- or underpayment in either Feb or March depending on how late the person signed up through the Marketplace.  If that isn't the case with your client's form and there are outright errors, he should request that the Marketplace issue a corrected 1095A, otherwise he will get a notice.