Refund on form 3849
View More DetailsPrior to applying the American Rescue Act Provisions, my client owed $1,810 repayment on form 8962 and had to repay $17o per form 3849. I get this.
After applying the American Rescue Act Provisions, my client has zero repayment per form 8962 and has a CA refund of $16,690 calculated on form 3849.
The monthly premium was $2,468 and the federal advance payment of PTC was $1,974 and CA was $30. They had to pay $464 per month.
It doesn't seem correct they would receive more than they paid out of pocket as a refund. I use Lacerte and I have no diagnostics for this. Column D on the form 3849 is showing zero; I think this is the problem. Has anyone else run into this?
Comments
The FTB is checking on this. Seems to be an unintended consequence. All we can do is to wait and see what happen. But it also doesn't sound right that CA is refunding everything.
You haven't provided the single most relevant piece of info, which is the amount of the federal PTC (not APTC, which is neither a credit nor an expense).
I had the same thing happen in Ultra Tax. It seems there is this sweet spot between over 400% of the poverty-line and under 600% of the poverty-line. Of course, CA Form 3849 is assuming they had to pay the Advanced Premium back on federal. We filed, but I am warning my clients that they might now get that big CA refund. We are also waiting to see.
"Of course, CA Form 3849 is assuming they had to pay the Advanced Premium back on federal. "
I don't think so. Can you provide any support or backup for this claim? Any citation at all that California law makes reference to repayment of excess advance payment of the PTC?
Type on my end. I warned my client might "NOT" get the big CA refund even though the program was calculating it as if they had to pay 100% of the premium.
Why would they not get the CA refund, if they qualify? The CA law takes into account only the actual federal PTC calculated on the federal tax return. APTC whether repaid or not is irrelevant.
"The FTB is checking on this. Seems to be an unintended consequence. " I don't understand what they are going to "check on". The intended consequence of the federal law was that people who received advance payment of PTC in excess of their actual PTC don't have to pay it back for 2020. How would that change California law?