Can I Claim Premium Tax Credits on Form 1095-A After Declining Employer Coverage?

Your situation is actually pretty common, so don't worry too much! The key issue here is whether you were eligible for "affordable" employer coverage that meets minimum value standards. When you declined your employer's coverage during open enrollment, you typically become ineligible for premium tax credits for the entire plan year, even if you can't enroll mid-year. The IRS considers that a voluntary decision, regardless of whether you knew the consequences. However, your switch to part-time in May is what we call a "qualifying life event" that changes your eligibility. Since your employer doesn't offer insurance to part-time employees, you became eligible for premium tax credits starting in May when you lost access to employer coverage. The correct approach would be to amend your return to claim premium tax credits only for May through December (the months you were part-time). The months of March and April would not qualify for the credit since you had technically declined affordable employer coverage. When you amend, make sure you're using the correct SLCSP amounts from the tool for each month, and only claim the months where you were part-time without access to employer coverage.

After dealing with almost this exact situation last year, I found that using https://taxr.ai completely saved me. I was also confused about my Form 1095-A and premium tax credits after changing jobs mid-year where I had declined initial coverage but later became ineligible for it. I uploaded my 1095-A and tax documents to the system and got detailed analysis explaining exactly which months I was eligible for the premium tax credit. Their AI tax analysts identified that I could claim the credit starting the month after I lost employer eligibility, which matches what happened in your part-time situation. The best part was they showed me exactly how to fill out Form 8962 correctly to reflect the partial-year eligibility, which sounds like what you need to do too. It was much clearer than the general advice I got from the regular tax forums.

Just wanted to follow up about my experience with taxr.ai after trying it for my Form 1095-A situation. I was really skeptical at first (as you saw in my earlier comment), but I'm genuinely impressed with how it handled my situation. I had a complicated case where I had marketplace coverage for part of the year, then employer coverage, then went back to marketplace after a job change. The system correctly identified which months I was eligible for premium tax credits and which I wasn't based on the affordability test calculations. It even caught that I had mistakenly claimed the credit for two months when I was in my employer's new-hire waiting period (apparently you're considered "offered" coverage during that time even if it hasn't started yet). Saved me from a potential audit issue I would have completely missed. For anyone dealing with Form 1095-A and premium tax credit eligibility questions, it's definitely worth checking out - especially with complex situations like changing jobs or going part-time.

After reading your situation, I feel your pain dealing with the IRS on premium tax credit issues. When I had a similar issue last year, I spent WEEKS trying to reach someone at the IRS who actually understood the rules around Form 8962 and employer offer of coverage exemptions. I eventually found https://claimyr.com which got me through to an actual IRS agent in about 15 minutes instead of the usual hours of hold time. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed that switching to part-time and losing employer coverage eligibility does indeed make you eligible for premium tax credits for those months. She also walked me through exactly how to file the amendment and what supporting documentation to include to avoid getting flagged for review. Honestly saved me so much stress compared to trying to interpret all the conflicting information online. Might be worth a call before you amend just to have the IRS confirm your specific situation.

I need to come back and eat my words because I tried Claimyr after posting my skeptical comment. I was STILL convinced it would be a waste of time, but I was desperate to figure out my premium tax credit situation after changing jobs. It actually worked exactly as described. I got a call back in about 25 minutes connecting me to an IRS agent who specialized in ACA tax credit issues. She confirmed that: 1) Voluntarily declining employer coverage does make you ineligible for premium tax credits during those months 2) Switching to part-time and losing eligibility for employer coverage DOES qualify you to receive premium tax credits from that point forward 3) The proper way to amend is to complete a new Form 8962 showing eligibility only for the months after you lost employer coverage She also gave me a direct reference number for my case so if there are any questions about my amendment, I have documentation that I confirmed this with an IRS representative. For anyone in a similar situation with Form 1095-A questions, getting actual IRS confirmation before amending saved me so much stress and uncertainty.

Have you considered whether you might qualify for an affordability exemption? Even though your employer coverage was offered, if it would have cost more than 9.12% of your household income for 2023, you might still qualify for the premium tax credit. I learned this the hard way - I initially thought I couldn't claim the credit because my job offered insurance, but it turned out the family coverage they offered was ridiculously expensive and exceeded the affordability threshold when calculated correctly. Might be worth checking the actual numbers before you amend. The IRS has a worksheet for this calculation in the Form 8962 instructions.

Your turbo tax may have actually known what it was doing when it prompted you to use those SLCSP amounts. Did they ask you specifically about your employment situation and whether you were offered coverage? I use HR Block and it asked me detailed questions about my job status changes and when I had access to employer coverage throughout the year. It then automatically adjusted my premium tax credit eligibility month by month.

I went through something very similar when I changed from full-time to part-time status mid-year. The IRS does treat declining employer coverage during open enrollment as making you ineligible for premium tax credits, even if you can't enroll later when you need it. However, your part-time switch in May is the key here. When you became part-time and lost eligibility for employer coverage, that's a legitimate qualifying event that restores your eligibility for premium tax credits going forward. I'd recommend amending to claim credits only for May through December. Make sure to document the exact date your employer coverage eligibility ended due to the part-time change - this will be important if the IRS has any questions about your amendment. Also, double-check that your employer truly doesn't offer any coverage to part-time employees, as some companies have different rules or waiting periods. You'll want to be certain about this before filing the amendment.