My parents are separated but still legally married. In 2018, my dad turned 65 and became eligible for Medicare, but he had gap of 3 months between that and the end of his COBRA coverage. He went on the marketplace and got a plan an collected a total of about $2900 in advance premium tax credits.
Fast forward to early 2019, Dad asks me to help file his taxes. We go through I tell him he would've gotten about $2500 back, but he's not eligible for the premium tax credits if he's married-filing-separately. We run the figures on a joint return and they make just over 400% the poverty level, so they don't qualify together either. It also looks like the repayments are capped at $2600 if he files separately, while they're not capped if they file jointly. He proceeds with a married filing separate return instead of asking Mom to do an amended joint return.
Mom has already filed her return at this point and was expecting about $2000 back. Before dad files she gets a letter from the IRS saying she needs to file form 8962 because of the tax credits that Dad got. We've got Dad's prepared, but not filed yet. I send her a copy of his 8962 and she writes back to the IRS that says he'll take care of the repayment when he files his return, but here's his 8962 that he will file for reference.
Dad files his returns and has a to pay a small amount with the $2600 premium repayment factored in. Mom never receives her refund. She later gets a letter saying she has to repay the tax credits Dad got that he wasn't entitled to, even though that was covered on his return. The IRS tells Mom she owes $600 instead of being due a refund of $2000.
I don't know all the details of her contact with the IRS, but she says she went to H&R block and had someone there call the IRS with her. The IRS doesn't seem to want to acknowledge that Dad actually repaid the premium tax credit when he did his return. It seems like they're interpreting her sending in a copy of Dad's 8962 as Mom saying that she will repay it. Today she sent me a message saying she finally got a reply from the IRS and they're still saying she has to pay $600.
Is there any way she can get this fixed? How should she proceed?
Submitted August 30, 2019 at 07:13PM by PF_PTC_Troubles https://ift.tt/2HysjCs
