California 3849 Premium Assistance Subsidy Calculates HUGE refund TP paid $2/mo
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The calculation of the California subsidy is based on the assumption that Federal health insurance payment will be repaid in circumstances where income is over 400% of the federal poverty line. However, for 2020, there is no repayment required for federal income tax purposes.
Federal Form 1095-A totals show Monthly enrollment premiums $24,879.24 and the monthly advance payment total of PTC of $24,855.24. So, my client paid $2 /month for health insurance.
California Form 3895 Form shows $24,879.24 enrollment premiums and zero Monthly advance payment of premium assistance subsidy.
California Form 3849 is calculating a $19,008 refund due to the client. AGI is $88,612 and household size is 2. So, California is indicating the borrower should have a monthly contribution amount of $1217. 11A shows $24,879, 11b shows $33,612, 11c shows $14,604, 11d shows zero, 11e shows $19,008, 11f shows $19,008.
It seems that ordinarily, the IRS would have required repayment in full since the borrower's income exceeded 400% of the federal poverty line. But, due to the unexpected tax law changes, this is not the case.
Lacerte is calculating a $19,008 refund from California. My client only paid $2 per month for health insurance.
Is this a windfall? Or will California be changing the calculation for 2020?