CA Form 3849 Premium Assistance Subsidy

Forum|Forum|5 years ago
April 17, 2021
2 replies
17 views

Incorrect CA Form 3849 "Premium Assistance Subsidy" when the income is above the federal poverty line., unable to check "not eligible to take the PAS" The program generates a huge net PAS to be refunded.

Lacerte Tax

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PamC

Level 6

I was startled to see the size of a client's CA subsidy when they didn't qualify for the federal PTC. And then I realized CA uses 601% of federal poverty level vs the federal 401%.

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evecAuthor

Level 2

Thanks for your response. For the poverty line between 401 to 601%, It generates a CA PAS refund on form 3849. I have a client at 410% poverty line, the PAS refund is $9700, although the subsidy from the CA was only $370. It doesn't make sense.

Drphibes

Level 6

The problem is the CA form has not caught up with ARPA which eliminated paying back excess premium tax credit. It assumes the taxpayer had to pay back the Fed credit so you don't see any amounts in line 11 column d of the CA 3849. I believe this is a mistake that CA has yet to catch. I have a client that was going to have to pay back about $8,000 of Fed premium credit that now pays none back and CA still wants to give him over $8,000. Am advising them to either go on extension for CA or get the $8,000+ and hold on to it for a year before they spend any of it.

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evecAuthor

Level 2

Thank you to clarify the issue.

I agreed this is a mistake of CA Franchise Tax Board. I found out that a taxpayer on a above 400% poverty line has a huge refund but a taxpayer on a 125% poverty line has to pay back the whole subsidy amount. The instruction of form 3849 is not available now, it said "it's subject to change and FTB approval".

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