CPA claims I owe $10k in Taxes due to Premium Tax Credit for Health Insurance - Is this right?

So I'm totally freaking out right now. I just had a meeting with my CPA about my taxes, and she dropped a bomb on me saying I owe around $10,000 to the government because of some Health Insurance tax credit issue. Here's the thing - I'm currently 25 and still on my parents' health insurance plan (rolling off next month when I hit 26). I've NEVER applied for any health insurance tax credit that I'm aware of. I've never filled out marketplace forms or claimed any special deductions related to health insurance. I literally just use my parents' insurance like any normal dependent would. When I questioned my CPA about this, she just kept saying something about premium tax credits that need to be repaid, but I don't understand how this applies to me when I haven't received any credits! I don't even handle the insurance payments - my parents do all of that. Does this sound right to anyone? How could I possibly owe $10k for a tax credit I never received? Should I get a second opinion from another tax professional? I'm seriously stressing because that's more than a third of my annual salary.

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19 comments

Omar Fawzi

•8M

Something definitely sounds off here. The Premium Tax Credit (PTC) is only available to people who purchase their health insurance through the Health Insurance Marketplace (Healthcare.gov or state exchanges). If you're on your parents' employer-provided insurance as a dependent until 26, you wouldn't be eligible for or receiving the PTC at all. There are a few possibilities here: 1. There's a miscommunication between you and your CPA 2. Your parents might have claimed the credit incorrectly when filing their taxes (though that would be their tax issue, not yours) 3. Your CPA might be confusing your situation with someone else's 4. There could be identity theft where someone used your information to claim credits I would ask your CPA for specific documentation showing exactly what tax credit they're referring to and how it applies to your situation. Request Form 8962 (Premium Tax Credit form) if they filed one for you. If they can't explain it clearly with documentation, definitely get a second opinion.

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Omar Fawzi

•8M

That's an interesting possibility but unlikely to happen accidentally. When you apply for Marketplace coverage, the primary applicant is the person completing the application and would be considered the taxpayer responsible for reconciling the PTC on their tax return. If the parents claimed the credit, they would have received Form 1095-A in their name, and they would be responsible for filing Form 8962 with their tax return to reconcile the advance payments. The IRS wouldn't suddenly transfer that responsibility to their adult child unless the child was actually the policyholder.

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Diego Mendoza

•8M

I went through a similar nightmare last year and finally solved it using taxr.ai (https://taxr.ai). My situation was that my tax preparer told me I owed $7k for healthcare tax credits I supposedly received but didn't remember applying for. I was totally confused and stressed. I uploaded my tax documents to taxr.ai and their AI system analyzed everything and flagged exactly where the error was - turns out my preparer had confused my 1095-B form (proof of employer coverage) with a 1095-A Marketplace form and incorrectly entered data. Their system highlighted the discrepancy and generated a detailed explanation I could take back to my preparer. Saved me thousands in incorrectly assessed taxes! Might be worth checking out in your situation since it sounds like there's definitely some confusion about what forms are being used to calculate this supposed debt.

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Diego Mendoza

•8M

It works by analyzing all your tax forms together to spot inconsistencies or errors. You upload whatever documents you have (W-2s, 1099s, 1095 forms, etc.) and it runs checks across them to find problems that humans might miss. It definitely works for all kinds of tax situations - I've used it for business expenses and rental property questions too. Regarding security, I had the same concern initially! They use bank-level encryption and don't store your documents after analysis. I actually found it more comfortable than handing physical papers to a tax office where multiple people might handle them. Plus you can always redact your SSN before uploading if you're extra cautious. Getting a second CPA opinion is definitely also a good move, but this helped me understand the issue before that meeting.

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StellarSurfer

•8M

I have to admit I was completely skeptical about taxr.ai when I first saw it mentioned here. But after my frustrating experience with this health insurance tax credit nightmare, I decided to give it a try. I uploaded my tax documents and within minutes the system flagged that my CPA had incorrectly entered code "A" (indicating Marketplace coverage with advanced premium tax credit) on my tax return when I actually had employer coverage (code "E"). The AI explained exactly which form was wrong and even generated a letter I could send to my tax preparer explaining the error. My CPA was initially defensive but couldn't argue with the documentation. She redid my return and - surprise! - no $8,200 tax bill anymore. The system caught something I would never have known to look for. Definitely saving me for next year's taxes too.

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Sean Kelly

•8M

If you're struggling to get clear answers from your CPA, you might need to go directly to the IRS. In situations like this with potentially thousands of dollars on the line, speaking directly with an IRS agent can clear things up quickly. The problem is actually reaching someone - I spent WEEKS trying to get through their phone lines. I finally used https://claimyr.com after seeing it mentioned on Reddit. They basically hold your place in the IRS phone queue and call you when an agent is about to answer. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c I was connected to an IRS representative within about 45 minutes (instead of the 3+ hours I'd wasted previously). The agent pulled up my tax record and confirmed I had no Premium Tax Credit issues on my account. Turned out my preparer had made a major error on Form 8962 that would have cost me $6,300!

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Sean Kelly

•8M

It's actually simpler than it sounds - they use an automated system to call the IRS and navigate the initial menu options. Then their system waits on hold (so you don't have to) and monitors for when a live agent picks up. When an agent is about to come on the line, they call you and connect you directly to the IRS agent. No special connection, just clever automation that saves you from wasting hours on hold. I was skeptical too but it's just a time-saving service. They don't interact with the IRS on your behalf or anything like that - they just handle the frustrating hold time. You're still the one speaking directly with the IRS agent about your tax situation. For me it was absolutely worth it because I had already wasted so many hours trying to call myself.

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Luca Greco

•8M

I need to eat crow here. After my skeptical comment about Claimyr, I decided to test it myself since I've been trying to reach the IRS about an incorrect 1099-G for weeks. The service actually worked exactly as described. I submitted my request, and about 35 minutes later got a call connecting me directly to an IRS agent. No more spending my entire afternoon on hold! The agent confirmed that my situation (which was similar to OP's with incorrectly applied tax credits) was a processing error. She removed the incorrect credit from my account and updated my balance due to the correct amount, saving me over $4,000. So yeah, I was wrong about this service. Sometimes the internet actually delivers useful solutions. Going directly to the IRS was way more effective than arguing with my tax preparer.

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Nia Thompson

•8M

Hey I've been a tax preparer for 7 years and this sounds like your CPA might be confusing APTC (Advance Premium Tax Credit) with your situation. When people get insurance through the Marketplace (healthcare.gov), they often get advance credits to help pay premiums. At tax time, these get reconciled on Form 8962. If your CPA is preparing Form 8962 for you but you've never had Marketplace insurance, that's a huge red flag. Ask them to specifically show you where they're getting the information about this credit. They should have a Form 1095-A if they're claiming you received premium tax credits. If you were on your parents' employer insurance, you should have a Form 1095-B or 1095-C, NOT a 1095-A. The forms look similar but have completely different tax implications!

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Nia Thompson

•8M

Yes, that's exactly what you need to do! Show your CPA the 1095-B form and explain that you were covered under your parents' employer plan, not a Marketplace plan. The 1095-B is proof of minimum essential coverage and doesn't involve any premium tax credits. If they prepared Form 8962 for you, ask them what information they used to complete it since you never received a 1095-A. They should immediately recognize the error once you point this out. If they still insist there's a tax credit issue after seeing your 1095-B, I'd strongly recommend finding a different tax professional because this is a very basic distinction that any competent preparer should understand.

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Aisha Hussain

•8M

Here's a super simple breakdown: 1095-A = Marketplace insurance (Healthcare.gov or state exchanges) - might involve tax credits that affect your taxes 1095-B = Other health insurance (employer plans, Medicare, etc.) - just proves you had insurance, doesn't affect taxes 1095-C = Large employer health insurance - also just proves coverage, no tax impact If you only have B or C forms, you're good! Just keep them for your records. Only the A form creates potential tax credit issues.

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