Affordable Care Act Credit Ineligible Months

[Anonymous]

I had a marketplace policy for all months in 2023 and received an accurate 1095-A. In September I became eligible for VA healthcare, so I became ineligible for ACA credits, but I kept my marketplace plan alongside VA coverage. VA issued a 1095-B showing my eligible months September - December. How can I tell TurboTax to calculate my ACA credit based on eligibility only for January - August?

[MonikaK1]

You will complete the ACA section in TurboTax based on the premiums you paid and the assistance you received for 2023. Answer the questions and follow the prompts in the program. Notify your Marketplace plan that you no longer qualify for assistance right away.

Once you are enrolled with VA for your health care, your enrollment meets the standard for minimum essential health care coverage under ACA. You are not eligible for assistance to lower your cost of health insurance premiums if you choose to purchase additional health insurance on the Marketplace to complement your VA health care coverage. Also, you cannot receive a tax credit for yourself when enrolling within the Marketplace if you are currently enrolled with VA for your health care.

Since VA care meets the standard for health care coverage, you wouldn’t be eligible for assistance to lower your cost of health insurance premiums if you chose to purchase additional health care coverage outside of VA. However, you may still purchase private health insurance on or off the Marketplace to complement your VA health care coverage.

See this FAQ from the VA for more information:

Can a Veteran or other beneficiary remain enrolled in VA health care and get the tax credit? No. According to ACA, if an individual has health insurance coverage (such as VA health care), he/she is not eligible for a tax credit to purchase additional health insurance coverage.

Though you can still purchase additional coverage through the Marketplace, you became ineligible for premium assistance in September 2023. It is up to the insured to contact Healthcare.gov to inform them when no longer eligible for the credit.

Because you did pay the premiums and you did receive assistance, that is what you will show on your tax return. Contact Healthcare.gov or your local Marketplace representative right away to inform them of your VA coverage.

[Anonymous]

I did "answer the questions and follow the prompts" when entering my 1095-A. Unfortunately none of those prompts or questions included asking whether I was ineligible for premium credits for certain months, which is why I'm here asking how to fix it.

The only solution I can think of is to input $0 for premiums for the four ineligible months, but then there will be inconsistencies between my tax return and the 1095-A.

[CatinaT1]

You will enter everything exactly as it is on your 1095-A. Don't change any numbers.

[Anonymous]

The 1095-A doesn't show which months I also had other coverage that need to be excluded from the credit calculation. The other coverage is only shown on 1095-B, which TurboTax says not to enter.

If TurboTax doesn't know which months to exclude for the credit calculation, it will calculate the credit for all months. The IRS is likely to catch this discrepancy, since they'll get a copy of the 1095-B, and I'll be assessed penalties and interest.

If the program can't handle this situation, just let me know please so I can find another solution.

[AbrahamT]

Just to clarify, does the 1095A show the premiums paid from January- August only? Then, that is the amount that you would enter. Go into the search bar to the right and type in 1095A

then jump into 1095A and enter all the information you received from the Marketplace exactly as it is indicated on the form. 

If you didn't receive any insurance from the months of September- December because you had VA insurance coverage, then there would be nothing to report for those months.

If you paid insurance through a different carrier, and you want TT to calculate the credit based on those payments, then you would need to enter the payments as follows;

Deductions & Credits

then;

down at the bottom where it says Medical Expenses

till you get to the screen where it asks you How much did you spend on Insurance premiums.

You don't need to enter any other coverage to be excluded from the credit calculation unless you actually paid for it. 

[Anonymous]

Thanks that's closer, but still not quite there. Let me add some clarification.

I had an ACA plan Jan - Dec, so all months of 2023 I paid that premium, and got a correct 1095-A.

I also had VA coverage starting in September through the end of the year, which has no premiums, and I got a correct 1095-B.

I entered the 1095-A and TurboTax calculated the ACA credit for all 12 months because I paid premiums all months. But because of VA coverage started in September I became ineligible for the credit at that point. So I'm trying to figure out how to tell TurboTax to prorate the credit, basically multiplying by eight out of twelve months I'm eligible for the credit.

[DaveF1006]

It depends. On your1095A between the months of September-December, are there amounts recorded in Columns B & C in addition to column A?

[taxlady28]

If you paid affordable care premiums after you became eligible for VA there is no way to fix that on TurboTax.  

[Anonymous]

Yes there are amounts recorded in Columns A & B for all months. My advanced premium in Column C was $0 for November and December because that's when the update regarding the VA coverage kicked in, but it was $331.14 for all other months, including September and October.

[Vanessa A]

Would you be able to send me a diagnostic copy of your return so we can further investigate this issue?  You can do this by taking the following steps:

TurboTax Online

• Tools
• Tax Tools
• Share My File with Agent
• then note the token number and respond to me with the number

TurboTax Desktop

• Online
• Send Tax File to Agent
• Send
• Then respond with the token number to this message

The diagnostic copy does not include any of your personal info, it just includes numbers and forms so we can help solve the issue. 

[Anonymous]

Thanks @Vanessa A , the token is 1178835.

I also see that I botched the months in my original reply to @DaveF1006. I edited it.

[DMarkM1]

If everyone in the coverage family is ineligible for any given month, then the Second Lowest Cost Silver Plan (SLCSP) in Column B is zero for those months.   However, in TurboTax something greater than zero is needed for the calculations.  Enter $1 in Column B for SLCSP for months everyone covered was ineligible (Sep-Dec). All other columns can be entered as shown on your form 1095-A.  

If some in your coverage family were eligible but some were not, then use HealthCare.gov/Tax-Tool/ to figure the SLCSP for those months. You are responsible for entering the corrected 1095-A Column B, SLCSP. 

Pub. 974 states,  "If you had a change in circumstances during (the tax year) that you did not report to the Marketplace, the SLCSP premium reported on Form 1095-A in Part III, column B, may be wrong. In either case, you must determine your correct applicable SLCSP premium. You do not have to request a corrected Form 1095-A from the Marketplace."

Bottom line:  For months Sep-Dec you were ineligible for Premium Tax Credit (PTC).  Any advanced PTC you received though not eligible (Sep-Oct) will be subtracted from your eligible PTC resulting in a net amount (repayment may be required if too much advanced or a credit if not enough advanced).  

[rfield2007]

Thanks @DMarkM1 - that did the trick! I used $0.01 instead of $1 in Column B and it seemed to recalculate properly. I was a little worried that I'd have to pay a pro $1K to file because of this small issue, but you saved me! Thank you!