BTS Posted March 14 Report Posted March 14 First time having this situation. Married couple. Husband retired and under Medicare. Spouse doesn't work and had Market Place Insurance for the whole year. 1095A column A has premium she paid. Column B was blank. So of course I went on HeathCare.gov and figured the SLCSP. Column C is blank also. Well, The premiums were reimbursed by the husbands old employer (part of their union contract). Does that reimbursement through his union go in column C ? As I mentioned column C on the 1095A is blank. If I leave it blank as the 1095A shows they get a refund. If I place the union reimbursed amount in there then they owe quite a bit. What's your opinion or what's the correct way to handle it ? Quote
kathyc2 Posted March 14 Report Posted March 14 You wouldn't put anything from union on the 1095A worksheet. Since there wasn't advance credits, you aren't required to reconcile the 1095A. What is the criteria to determine how much the union pays? Is it a set amount? Bases on their net premium? Something else? Did they get a 1099 or such from union for the amount they received? Or, is the amount they received tax free retiree benefit? 1 Quote
BTS Posted March 14 Author Report Posted March 14 No 1099 from the union. Tax free retirement benefit. The union just reimburses them the full premium amount. They also get free lawyer services too !!! Crazy. My grandfather retired from there in the 50's. Quote
kathyc2 Posted March 14 Report Posted March 14 If they are paying premiums with tax free money, I don't see how they can make a claim for credit. This isn't anything official, just my logic, but if they would make the entire amount from union taxable, then take credit. I doubt they would come out better that way though. 3 Quote
BTS Posted March 14 Author Report Posted March 14 I searched the IRS site to see if any Market Place premiums reimbursed by outside of the government sources needed to go in column C and could not find anything stating it does. Thus my question. If I claim the reimbursement in column C, they owe a few grand. If I leave column C blank as it is on the 1095A, then they get back a few grand. Quote
BTS Posted March 14 Author Report Posted March 14 1 hour ago, jasdlm said: Delete the 8962 Doesn't work that way. 8962 automatically populates itself. Quote
jasdlm Posted March 14 Report Posted March 14 12 minutes ago, BTS said: Doesn't work that way. 8962 automatically populates itself. Maybe we're using different software. My understanding is that there was no APTC claimed, so no requirement to file an 8962/reconciliation. Sorry. According to Healthcare.gov: If you paid full price and are sure you don't qualify for the premium tax credit. You don't have to fill out or include Form 8962, Premium Tax Credit, when you file your federal taxes. 2 Quote
jklcpa Posted March 14 Report Posted March 14 22 minutes ago, BTS said: Doesn't work that way. 8962 automatically populates itself. Delete the entries and the software won't create the form. 1 Quote
mcb39 Posted March 15 Report Posted March 15 14 hours ago, jklcpa said: Delete the entries and the software won't create the form. However, I have had a few reject from efile because the 8962 was not included in the return. The efile system knows who received one and rejects if it is not included in the return. 1 Quote
jklcpa Posted March 15 Report Posted March 15 29 minutes ago, mcb39 said: However, I have had a few reject from efile because the 8962 was not included in the return. The efile system knows who received one and rejects if it is not included in the return. For those that rejected, did they receive the help via the APTC requiring reconciliation, were they people without any APTC that simply purchased a plan through Marketplace, or some other identifiable reason? Quote
BTS Posted March 15 Author Report Posted March 15 31 minutes ago, mcb39 said: However, I have had a few reject from efile because the 8962 was not included in the return. The efile system knows who received one and rejects if it is not included in the return. Thats the issue. If 1095A was issued, then the return will be rejected. The IRS expects it and form 8962. Spouse paid full price for the lowest cost plan. And was reimbursed by the husbands union. Im using Proseries. But there was no advanced credits on the government side. More or less a wash. 1 Quote
BTS Posted March 15 Author Report Posted March 15 Maybe I am looking at this the wrong way. Maybe they are entitled to the APTC they didnt get. Based on what they paid and their income they are. Who cares if his union reimbursed it. Just doesn't seem correct. But then again we all remember the stupid stimulus payments. How some got the payment and shouldn't have and didn't have to repay them. And the other stimulus situations depending on filing status. 2 Quote
Lion EA Posted March 15 Report Posted March 15 I haven't had this situation, but it seems like 2 separate transactions: purchase of marketplace insurance, and then income from the union. Or, reimbursement from the union. Form 8962 would be filled out per its directions. Would the income go on one of the Other Income lines? Or, would it reduce any Schedule A medical deduction? Did the union pay the insurance company directly or send a check(s) to your client? 2 Quote
mcb39 Posted March 15 Report Posted March 15 34 minutes ago, jklcpa said: For those that rejected, did they receive the help via the APTC requiring reconciliation, were they people without any APTC that simply purchased a plan through Marketplace, or some other identifiable reason? From what I remember, it was usually someone who had Marketplace for part of the year and "forgot" about it. My experience is that if they were issued a 1095A; the IRS knows it and will reject the return if it is not included. 2 Quote
Gail in Virginia Posted March 15 Report Posted March 15 If you have marketplace insurance, whether you get an advanced credit or not, the IRS expects a reconciliation. They are looking not only to see if you got a credit you shouldn't have but if you should have gotten a credit you didn't get. I would say that you do the 1095A the way it came without including any reimbursement they received from the Union. I wonder if the amount of insurance premium they receive back in 2025 based on their 2024 situation causes part of the union reimbursement to become taxable income. And if so, for 2024 or for 2025 when they received the reimbursement? 3 Quote
BTS Posted March 15 Author Report Posted March 15 21 minutes ago, Lion EA said: I haven't had this situation, but it seems like 2 separate transactions: purchase of marketplace insurance, and then income from the union. Or, reimbursement from the union. Form 8962 would be filled out per its directions. Would the income go on one of the Other Income lines? Or, would it reduce any Schedule A medical deduction? Did the union pay the insurance company directly or send a check(s) to your client? Client received the money. Quote
jklcpa Posted March 15 Report Posted March 15 9 minutes ago, BTS said: Maybe I am looking at this the wrong way. Maybe they are entitled to the APTC they didnt get. Based on what they paid and their income they are. Who cares if his union reimbursed it. Just doesn't seem correct. But then again we all remember the stupid stimulus payments. How some got the payment and shouldn't have and didn't have to repay them. And the other stimulus situations depending on filing status. OK, I tried finding an answer to the reimbursement issue. Union plans may fall into the category of an "Individual Coverage Health Reimbursement Arrangement (ICHRA)", and that is what you need to find out. ICHRAs allow employees to choose their own plans and allow employer reimbursement of employees' qualified medical expenses including the insurance premiums. Those reimbursements are tax-free if used for qualified expenses. If this is the case with your client's reimbursement, then they are not eligible for any PTC. I think the reference is IRC sec 36B(c)(4) but would suggest you do further research into the plan's exact details. It may involve you or client contacting the union's plan administrator to be sure. 2 Quote
kathyc2 Posted March 15 Report Posted March 15 40 minutes ago, BTS said: Maybe I am looking at this the wrong way. Maybe they are entitled to the APTC they didnt get. Based on what they paid and their income they are. Who cares if his union reimbursed it. Just doesn't seem correct. But then again we all remember the stupid stimulus payments. How some got the payment and shouldn't have and didn't have to repay them. And the other stimulus situations depending on filing status. It comes down to a matter of conscience. If you didn't know they received payment from union, you would have entered the 1095A, looked up SLCSP and credits would be generated. However, since you know someone else de facto paid it, would you feel right signing the return with credits? As far as the 8962 goes, you can either not input the 1095A or not enter the amounts you needed to look up for SLCSP on worksheet in Pro. 1 Quote
kathyc2 Posted March 15 Report Posted March 15 4 minutes ago, Gail in Virginia said: If you have marketplace insurance, whether you get an advanced credit or not, the IRS expects a reconciliation. They are looking not only to see if you got a credit you shouldn't have but if you should have gotten a credit you didn't get. I don't think so. I just amended 2022 and 2023 returns for client that had 1095A paying full price. The previous preparer did not look up SLCSP to give them the credit. IRS isn't going to be looking up info that's not on 1095A to see if there should be a credit. 1 Quote
BTS Posted March 15 Author Report Posted March 15 2 minutes ago, jklcpa said: OK, I tried finding an answer to the reimbursement issue. Union plans may fall into the category of an "Individual Coverage Health Reimbursement Arrangement (ICHRA)", and that is what you need to find out. ICHRAs allow employees to choose their own plans and allow employer reimbursement of employees' qualified medical expenses including the insurance premiums. Those reimbursements are tax-free if used for qualified expenses. If this is the case with your client's reimbursement, then they are not eligible for any PTC. I think the reference is IRC sec 36B(c)(4) but would suggest you do further research into the plan's exact details. It may involve you or client contacting the union's plan administrator to be sure. I feel same way. They do not qualify for any PTC. But if I leave column C on form 1095A blank, they get a few thousand back on their tax return (PTC). If I put in the amount they were reimbursed then they would owe a few thousand. Which is wrong. I can not leave form 1095A off the return or it will be rejected. Maybe a mailed in return is in order with a note. Quote
kathyc2 Posted March 15 Report Posted March 15 3. If you paid full price and are sure you don't qualify for the premium tax credit You don’t have to fill out or include Form 8962, Premium Tax Credit, when you file your federal taxes. Keep your Form 1095-A with your other tax records. https://www.healthcare.gov/taxes/marketplace-plan-without-savings/#:~:text=If you paid full price and are sure you don,with your other tax records. 3 Quote
BTS Posted March 15 Author Report Posted March 15 2 minutes ago, kathyc2 said: 3. If you paid full price and are sure you don't qualify for the premium tax credit You don’t have to fill out or include Form 8962, Premium Tax Credit, when you file your federal taxes. Keep your Form 1095-A with your other tax records. https://www.healthcare.gov/taxes/marketplace-plan-without-savings/#:~:text=If you paid full price and are sure you don,with your other tax records. Proseries automatically fills out 8962 once 1095a is entered. Can not delete it. Form 1095A has to be included or the return will be rejected. Catch 22 Quote
kathyc2 Posted March 15 Report Posted March 15 Taking it a step further, they also don't qualify to take the premiums on Sch A, since it was paid with tax free money. 2 Quote
kathyc2 Posted March 15 Report Posted March 15 1 minute ago, BTS said: Proseries automatically fills out 8962 once 1095a is entered. Can not delete it. Form 1095A has to be included or the return will be rejected. Catch 22 Absolutely not true. I use Pro and have one that paid full price. If I don't enter amount on 1095A w/s for SLCSP that I had to look up, no 8962. 1 Quote
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