Advanced Premium Payments for Health Insurance

[Tom]

I have a client that elected to use their former employer’s COBRA coverage for 2018. (Outside of COBRA coverage, they were not eligible to be covered by an employer’s plan.)  Taxable income for 2018 was only just over $10,000.  At this income level, the taxpayer would have qualified for advanced premium payments toward Marketplace coverage for 2018.  Shouldn’t this taxpayer receive that same financial assistance when they file their 2018 return? If so, how do we make the Lacerte program calculate this benefit?

[TAXOH]

No. In order to receive the advance premium tax credit you have to have a marketplace plan.

[IntuitCharlene]

This would be correct. They would not qualify unless they received a 1095-A. Per the instructions here: https://www.irs.gov/pub/irs-pdf/i8962.pdf 

You may take PTC (and APTC may be paid) only for health
insurance coverage in a qualified health plan (defined later)
purchased through a Health Insurance Marketplace
(Marketplace, also known as an Exchange). As a result, you
should complete Form 8962 only for health insurance coverage
in a qualified health plan purchased through a Marketplace. This
includes a qualified health plan purchased on HealthCare.gov or
through a State Marketplace.

[IntuitJim · Accepted solution]

Tom, thanks for joining the community!

Since your taxpayer did not purchase Marketplace insurance, as TAXOH and Charlene said, there is no PTC.

However, if the taxpayer itemizes and paid after tax for the COBRA premiums, they might receive a deduction on Schedule A for medical/ insurance premiums.  Thanks for choosing Lacerte!