If a self-employed taxpayer has to repay all of the premium tax credit received in 2020, can that amount be added to the amount actually paid for premiums during the year to determine deduction for the SE health insurance on Schedule 1?
AGI is at 400% level and I already have an IRA but I am still concerned about the amount of SEHI. It is too low and if the TP has to pay back the entire premium advance shouldn't that count as SEHI?
Does the 8962 show 400%, or 401%?
As Rick says, your first step is to see if you can do ANYTHING to get income below 400%. Between IRAs, SEPs and the other things Rick mentioned, is that possible?
Because the program is giving weird SEHI results, it seems very likely that it is possible without a huge amount of contributions (if the taxpayer can afford to contribute to a IRA or SEP). That is most likely your best option, to avoid the full repayment.
If absolutely nothing can be done to reduce MAGI below 400% to avoid the full repayment (which seems unlikely), then just don't 'link' the 8962 to Schedule C on the 1095-A worksheet. Then enter the actual full amount paid (including the repayment) on the spot on Schedule C for SEHI payments.
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