Hello,

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?