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Excess advance premium tax credit repayment exclusion & SE health insurance

luschincpas
Level 1

I have a client that had an excess advance premium tax credit repayment, but does not have to pay it back due to the new law for 2020. However, when ProSeries calculates his self-employed health care deduction it is not backing out the subsidy amount. It's calculating the deduction based on the full premiums paid. I assume the program is doing this because he would normally pay back the subsidy and then get to use the full amount of the premiums in the SE health insurance calculations. Has anyone else run across this and how did you handle it? Thanks!

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2 Replies 2
TaxGuyBill
Level 15

Yes, (a) wait for the update or (b) manually calculate and override.

dhoyt
Level 2

I have one CPA at another website who says it may be intended to allow the deduction even though the taxpayer didn't pay for the insuracne and that the IRS has not clarified that yet. But I think software error is much more likely. I will just do the manual calculation. 

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