IRS reminds taxpayers of ARPA suspension of 2020 excess APTC repayment

By Sally P. Schreiber, J.D.

Editor: Paul Bonner

Taxpayers who had excess advance payments of the premium tax credit (excess APTC) for the 2020 tax year are not required to file Form 8962, Premium Tax Credit, or repay them on their 2020 individual tax return, the IRS highlighted in a news release (IR-2021-84). The American Rescue Plan Act (ARPA), P.L. 117-2, suspended the repayment requirement for tax year 2020.

An excess APTC is the amount by which the taxpayer's APTCs exceed his or her Sec. 36B premium tax credit (PTC). Eligible taxpayers may claim a PTC for health insurance coverage in a qualified health plan purchased through a health insurance marketplace. APTCs are paid directly to insurers, reducing the premiums for a qualified health plan that taxpayers must pay out of pocket. Taxpayers use Form 8962 and information Form 1095-AHealth Insurance Marketplace Statement, to figure the amount of their PTC, reconcile it with their APTC, and either increase their tax liability by all or a portion of their excess APTC or claim a net PTC.

Taxpayers who filed their 2020 tax return reporting an excess APTC do not need to file an amended tax return or contact the IRS. The Service said it would reduce any reported excess APTC repayment amount to zero and reimburse taxpayers who had repaid an excess APTC. Taxpayers claiming a net PTC for 2020, however, must file Form 8962.

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