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I have a situation I have never encountered. A client that did their own taxes last year added $15K in expenses on a property sold to the profit and not to the cost basis. This put her income to where she paid $5258 in taxes that year and recently got a bill for $6K that she has to pay back in premium tax credits. In an effort to recreate a 1040 to base the 1040X off of so she could file it along with an 8962. I discovered the mistake and her liability should have been $444.00 and not $5258.00 and she also fell below the maximum income for the premium tax credit. So my question is does she need to file a form 8962 when the 1040X shows her income much lower than what the demand for repayment is based on? Any guidance here, or am I in the wrong place?
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