Column C of Federal Form1095A is different than California Form 3895

Forum|Forum|5 years ago
May 7, 2021
1 reply
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IRS Form 1095-A shows 0 advance PTC while FTB Form 3895 shows advance PAS (Premium assistance subsidy) of $17,300.68. Client (Household of 4) had an allowable loss on K-1 offsetting wages, which in turn decreased his income to $26,925, qualifying him to PTC refund in the amount of 20,582.

It doesn't make sense that he got $17,300.68 in premium assistance subsidy as shown on CA 3895 and at the same time will be getting a cash refund of $20,582 as Net PTC. Any explanation will be greatly appreciated.

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Best answer by qbteachmt

"but shouldn’t the Net PTC take into account the amount of advanced subsidy received in order to prevent double dipping?"

It's the other way around: The State PAS takes the PTC (which your client didn't get in advance) into consideration, but the Fed 1040 credit doesn't take the PAS into consideration. Your client had no APTC, so there is only the CA PAS amount, which is the net subsidy after the federal PTC is taken into account. Does your form show they have to pay back the CA excess APAS?

I found you a similar discussion topic, but note it is from before the ARP Act:

https://www.caltax.com/forums/topic/form-3849-refunding-federal-premium-tax-credit/

qbteachmt

Level 15

It's not a Refund. It's a Refundable Credit.

The two programs use different limits. The 1095-A isn't used for CA; the CA plan doesn't end at 401%.

I found this comparison article for you:

https://thefinancebuff.com/california-aca-health-insurance-premium-subsidy.html

Don't yell at us; we're volunteers

A

aedwanAuthor

Level 5

Thanks so much qbteachmt!
I agree that they are two different programs but shouldn’t the Net PTC take into account the amount of advanced subsidy received in order to prevent double dipping? Taxpayer was receiving advanced subsidy as reflected on the state form which the federal form is not reconciling, resulting in a large credit.

qbteachmtAnswer