Helath Insurance Premium Tax Credit

I've used H&R Block tax software for years, and once in a while have an issue with it, but can always find/fix the problem. This year, I'm not
sure who is right, me or the software. I've finished the Federal, and the software does an "Accuracy Review". The Accuracy Review threw this up at me:
------------- "Data Verification 1 of 1" "You're getting a premium tax credit of $2,880 and are claiming insurance premiums. To avoid a double benefit, reduce the insurance premiums you are claiming by the amount of your premium tax credit. Once you've done that you can disregard this message even if it continues to display in Accuracy Review."
"Location: Schedule A - Itemized Deductions"
"Make any changes in the form below."
"Note: Data Verifications are items that may or may not need fixing. You should review these items before filing. If no action is needed, you don't need to clear the Data Verification." --------------
I don't see that I am claiming a double benefit, since all insurance premiums claimed on Schedule A have been paid by us either by credit card or checking account, all for which I have records.
Here's the basics.
California (but this is about the Federal portion, can't do state yet) married filing jointly both retired all of 2017 no dependents
husband was 65 all of 2017 wife was 64 Jan-Apr 2017, 65 May-Dec 2017 neither collecting Social Security in 2017
husband began Medicare in Jan 2017 husband pays Medicare (CMS) $134/mo, originally via credit card, then auto-pay via checking account; 2017 amount paid is $1,608 husband also has Kaiser Sr. Advantage (Medicare) and pays $126/mo. via credit card; 2017 amount paid is $1,512 * husband's total 2017 paid for health insurance is $3,120 *
wife began Marketplace insurance in Jan 2017 (not yet 65, and Medicare ineligible) wife gets insurance premium tax credit and pays Marketplace, via credit card $109/mo. for Jan-April; 2017 total paid is $437 wife turns 65 in May 2017 and begins Medicare (CMS), and pays $134/mo. via checking account; 2017 total paid for May-Dec 2017 is $1,072 wife also begins Kaiser Sr. Advantage Medicare (CMS) in May, and pays $126/mo. via credit card for May-Dec 2017; 2017 total paid for May-Dec is $1,008 * wife's total 2017 paid for health insurance is $2,517 *
** combined 2017 total paid for health insurance is $5,637 **
wife received 1095-B for Kaiser Sr. Advantage Medicare insurance; months May through Dec. checked, indicating coverage for those months
wife also received 1095-A for Marketplace insurance;
Part I, Recipient Information, box 4, Recipient's name, shows husband's name (not sure why); box 7, Recipient's spouse's name shows wife's name
Part II, Covered Individuals, col. A., Covered individual name shows wife's name
Part III, Coverage Information is as follows: Col. A, Monthly enrollment premiums, Jan through Apr all show $1,041.96 Col. B, Monthly second lowest cost silver plan (SLCSP) premium, Jan through Apr all show $1,205.91 Col. C, Monthly advance payment of premium tax credit, Jan through Apr all show $932.61
By the way, Col. A minus col. C = $109.35, the premium paid by us to the Marketplace for Jan-Apr 2017.
One more thing that may be relevant:
When I finished the Health Care Coverage section, the Premium Tax Credit Summary showed this:
------------------- "Your Premium Tax Credit" "We've done the math, and you'll need to pay some money back because you got too much of an advance premium tax credit when you signed up for marketplace insurance." "Here's how we figured your premium tax credit:"
Number of people in household, 2 Your total household income, $xx,xxx Amount of advance premium tax credit you should have received, $2,880 Actual advance premium tax credit you received, $3,732 Amount you need to pay back*, $852 *This might have been reduced, depending on your income level. To make sure you receive the correct advance premium credit in the future, update your information with the marketplace throughout the year--whenever you have a change in income or family situation. -------------------
In fact, we did receive about $11K more in income (Schedule K1, Form 1041) than we had planned when my wife signed up in the marketplace, so returning $852 is probably correct. But, I don't understand why I would also have to reduce my actually paid, out of pocket, insurance premiums by $2,880, as indicated in the Accuracy Review/Data Verification.
I wonder if I should go back to TurboTax. I used it about 10 years ago, but liked H&R better.
If you've read this far, thank you very much.
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On 3/31/18 4:37 PM, MikeJ wrote:

You have not double counted your medical insurance premium deduction. In fact, you have understated it by the $852 that you have to pay back. Under the rules established for the Advanced Premium Tax Credit, any amount you have to pay back for 2017 is considered premiums paid for that tax year. If you had been entitled to an additional credit You would have had to treat that as a reimbursement and subtracted the amount from premiums paid.
Note that the message you received said "may or may not need fixing." You fall into the "may not" bucket.
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Thank you for the reply.
The $2,880 Premium Tax Credit that H&R's Data Verification has flagged, and suggests that I 'may' have to reduce my medical insurance premiums by this amount, is calculated on Form 8962, Premium Tax Credit (PTC), Part II, line 24. I just finished reading the IRS instructions for Form 8962. What a byzantine set of calculations to get to $2,880, but I'm not surprised.
So $2,880 was the total PTC that my wife should have received for the four months Jan-Apr 2017 ($720/mo.). But, the PTC she received per her 1095-A was $3,732, resulting in an Excess of advance payment of PTC to my wife of $852. OK. I get it.
Now, about claiming this $852 as a health insurance premium, I suppose I must wait to claim it in 2018, since it will be paid to the IRS in 2018. Furthermore, if I were to incude on this 2017 tax return as a health insurance premium, it would change my AGI/MAGI, which in turn would change Form 8962 and the Excess advance payment of PTC.
Form 8962 instructions state:
"Deductions for health insurance premiums. You cannot deduct the portion of your health insurance premium on your tax return that is paid for by the PTC or APTC (after you determine how much of any excess APTC you must repay). If you are deducting medical expenses as an itemized deduction, see Pub. 502, Medical and Dental Expenses."
I will have to read Pub. 502 to see if it addresses repayment of Excess advance payment of PTC.
This is the first and last year (2017) for which I have to complete and file a Form 8962 with my return. Thank goodness.
Yes, this issue does indeed fall into the 'may not need fixing' bucket.
I do appreciate your reply.
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On 4/1/18 4:33 PM, MikeJ wrote:

Don't bother. Here is what it says. Answer is in last sentence.
You can't include in medical expenses the amount of health insurance premiums paid by or through the premium tax credit. You also can't include in medical expenses any amount of advance payments of the premium tax credit made that you did not have to pay back. However, any amount of advance payments of the premium tax credit that you did have to pay back can be included in medical expenses.
Here is the example:
Example 1. Amy is under age 65 and unmarried. The cost of her health insurance premiums in 2017 is $8,700. Advance payments of the premium tax credit of $4,200 are made to the insurance company and Amy pays premiums of $4,500. On her 2017 tax return, Amy is allowed a premium tax credit of $3,600 and must repay $600 excess advance credit payments (which is less than the repayment limitation). Amy is treated as paying $5,100 ($8,700 less the allowed premium tax credit of $3,600) for health insurance premiums in 2017. Because $5,100 is more than 10% of Amy's AGI, when she fills out her Schedule A, she enters $5,100 on line 1.
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That example says it all, and that I claim the expense this year. So, I added the advance payment of the PTC, $852, to Sch. A, line 1, and this did not affect any figures on Form 8962, that is, $852 stayed $852. I see how the numbers flow. Of course, I'll forget tomorrow.
Many thanks for all the help, Alan. This thread is going into my archives.
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