I received a reject on Form 8962 or 8917 where the return has unemployment income and an exclusion. How can I fix this reject?
The IRS has modified the business rule to allow these returns to be sent. No update to Drake Tax was necessary as the calculation was correct. Drake was able to recycle rejected transmissions today (March 26, 2021).
Note: It is important to check for an acceptance on these recycled returns. If it is rejected later for another reason, you may have to fix the issue, recalculate, and retransmit again.
The update released March 25, 2021 allows 1040 returns to be e-filed for taxpayers who are claiming the Premium Tax Credit (PTC). Returns with SEHID and PTC can also be filed. This also resolves reject F8962-002-03. After getting updates, affected returns will need to be opened in Drake20, recalculated, reviewed, and then retransmitted.
Advanced Premium Tax Credit Repayment
As of April 3, 2021, EF message 2613 has been removed and returns with excess Advanced Premium Tax Credit (APTC) can now be filed.
The American Rescue Plan Act of 2021 (ARPA), passed in March 2021, contains a provision to no longer require repayment of any excess APTC on 2020 tax returns. Recent IRS guidance relative to this provision instructs taxpayers who have an amount on line 29 of Form 8962 to not include Form 8962 with their return.
Drake20 will continue to produce Form 8962 for review purposes only. The form will not be included with the e-filed return, and should not be mailed with a paper-filed return. Although filing Form 8962 is required of taxpayers receiving APTC, the IRS intends to make internal changes that will prevent these taxpayers from receiving correspondence regarding Form 8962 not being filed.
The IRS has not yet released guidance on returns that were previously filed with an advanced premium tax credit repayment included on line 29 of Form 8962.
For details on the impact of the Unemployment Compensation Exclusion, including which deductions and exclusions from income might be affected, visit this page on irs.gov: https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemployment-compensation and Related Links below.