May 3, 2021 10:53 pm

No Repayment of Excess Advance Premium Tax Credits

The American Rescue Plan Act of 2021 suspended for 2020 any required repayment of an excess advance premium tax credit. The IRS has now clarified what individuals should do with respect to this law change (IR-2021-84):

  • If you haven’t yet filed your 2020 return, you do not have to complete Form 8962 or otherwise report any excess advance premium tax credit repayment on your 2020 return.
  • If you already filed your 2020 return and reported an excess advance premium tax credit repayment, do not file an amended return. The IRS will reimburse you for this amount.

However, if you did not obtain the full premium tax credit (e.g., your advance was less than the amount to which you were entitled; you didn’t receive any advance), you must complete Form 8962 to figure your net credit amount.

Note: Reconciliation is still required for pre-2020 years. The IRS may send a letter about a 2019 return to obtain more information before it processes the return.

Tax Glossary

Nonperiodic distributions

A 20% withholding rule applies to nonperiodic distributions, such as lump-sum distributions, paid directly to employees from an employer plan.

More terms