Medical Insurance Deduction with California Premium Assistance Subsidy

Forum|Forum|5 years ago
February 28, 2021
2 replies
31 views

Lacerte automatically reduces the deduction (schedule A or adjustment, as appropriate) for medical insurance by the amount of federal premium tax credit as calculated on federal Form 8962.

However, Lacerte is not reducing the insurance deduction for the amount of California subsidy received as calculated on Form 3849. Shouldn't it be?

Am I missing a checkbox somewhere, or is this a program error?

(This particular client is between 401 and 500% of poverty level and has to pay back all the federal subsidy but is then receiving a very large additional California subsidy. Lacerte is not reducing the premiums at all.)

Lacerte Tax

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abctax55

Level 15

I'm having trouble with how Lacerte is handling these also.... especially if there's SEHI involved. One client has a $ 28000 CA refund. While the client might like that, I don't think the FTB would.

HumanKind... Be Both

Drphibes

Level 6

Have had 2 clients where their income was too high for Federal support so that gets paid back but under for CA and CA makes up for what you did not get from Federal if you are in a certain income level. Result is big owe Federal, but big refund from CA. Scary.

S

StknCPAAuthor

Level 5

Yes, it is a bit scary. I will have to tell a farmer (due 03/01) this on Monday.

My problem is that it appears that Lacerte is handling the deduction for medical premiums incorrectly in this situation and I do not see a way to enter it differently or to override it.

Any comment on how to get Lacerte to adjust the medical insurance deduction to account for federal and California (if required) premium assistance?

T

tbolton

Level 3

Hi there - was anyone able to resolve this?

The federal was finally updated to get rid of the payback. I have a client that got PTC $4,981 from federal. Made too much money. Now that payback has been cleared for federal.

BUT for California the client got $173 PTC. So lacerte is calculating a big refund to the client.

This is not logical. It seems form 3849 line 11 (d) needs to be populated with the federal PTC. But I can't for the life of me figure this stupid form out. Anyone have any perspective - client really wants their return 😞

Mucho thanks to anyone that can help!

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