Aren't we supposed to net out on Schedule A medical insurance due to the refund of the ptc? TP deducted all premiums on Sch a in 2015 and received his subsidy in 2016. Or can this be treated as a recovery of an itemized deduction? TP did have enough medical to exceed the % haircut. Did I miss something here?
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Yes, only the net should show up on Schedule A.
Publication 502:
Premium Tax Credit
You can't include in medical expenses the amount of health insurance premiums paid by or through the premium tax credit. You also can't include in medical expenses any amount of advance payments of the premium tax credit made that you did not have to pay back. However, any amount of advance payments of the premium tax credit that you did have to pay back can be included in medical expenses.
Example 1.
Amy is under age 65 and unmarried. The cost of her health insurance premiums in 2016 is $8,700. Advance payments of the premium tax credit of $4,200 are made to the insurance company and Amy pays premiums of $4,500. On her 2016 tax return, Amy is allowed a premium tax credit of $3,600 and must repay $600 excess advance credit payments (which is less than the repayment limitation). Amy is treated as paying $5,100 ($8,700 less the allowed premium tax credit of $3,600) for health insurance premiums in 2016. Because $5,100 is more than 10% of Amy's AGI, when she fills out her Schedule A, she enters $5,100 on line 1.
Example 2.
The facts are the same as in Example 1, except Amy is allowed a premium tax credit of $4,900 on her tax return and receives a net premium tax credit of $700. Amy is treated as paying $3,800 ($8,700 less the allowed premium tax credit of $4,900) for health insurance premiums in 2016. Because $3,800 is more than 10% of Amy's AGI, when she fills out her Schedule A, she enters $3,800 on line 1.
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