The Premium Tax Credit (PTC) is a refundable tax credit that helps individuals and families afford health insurance purchased through a Marketplace under the Affordable Care Act (ACA). The American Rescue Plan Act of 2021 (ARPA) introduced several temporary but impactful enhancements to this credit.

Expanded Eligibility for Taxpayers Over 400% of the Federal Poverty Level (FPL)

Before ARPA:
Taxpayers with household income above 400% of the FPL were not eligible for the PTC.

Under ARPA (2021–2022):
The income cap is eliminated. Taxpayers above 400% of the FPL can now qualify for the PTC.

Example:
A single 45-year-old with $58,000 in income (450% of FPL) would not have qualified under previous rules. Under ARPA, they may now receive a PTC of approximately $1,250.

New Percentage Tables Increase PTC Amounts

PTC is calculated based on the cost of a benchmark health plan minus the taxpayer’s required premium contribution, which is tied to household income.

ARPA Changes:

• Reduces the maximum premium contribution to 8.5% of income (from 9.83%) for 2021 and 2022.

• Expands support for those at lower income levels.

Example:
A 21-year-old at 150% of FPL may see their PTC increase from $3,500 to $4,300 under ARPA.

Special Rule for Unemployment Compensation Recipients in 2021

If you received (or were approved to receive) unemployment compensation for at least one week in 2021, the following applies:

• You automatically qualify as an eligible PTC recipient (unless you’re eligible for affordable employer coverage).

• Your household income above 133% of FPL is disregarded when calculating your PTC.

This effectively caps your required contribution and boosts your PTC, regardless of actual income above 133% of FPL.

No Repayment of Excess Advance PTC for 2020

Under normal rules, if advance PTC payments exceed the actual calculated credit, the overage must be repaid as additional income tax (subject to a cap).

ARPA Exception (2020 only):
If advance PTC exceeded your actual credit in 2020, you do not have to repay the excess.

Important Note:
If you’ve already filed your 2020 return and repaid excess credit, the IRS advises not to amend your return yet. Guidance on refund procedures is forthcoming.

Contact Us

Questions about your eligibility or tax return?
📞 Call us at 561-995-0064 to speak with a tax advisor.

The U.S. Internal Revenue Service (IRS) has launched a new initiative, Operation Hidden Treasure, to increase enforcement efforts related to unreported cryptocurrency income.
This marks a significant step in the agency’s evolving approach to crypto tax compliance.

A Dedicated Crypto Enforcement Effort

Operation Hidden Treasure is a joint effort between:

• The IRS Office of Fraud Enforcement

• The IRS Criminal Investigation Division

The program will train agents to use blockchain analysis to identify tax evasion patterns. It’s part of a broader strategy by the IRS to address emerging financial threats.

At a Federal Bar Association tax conference, Damon Rowe, Director of the Office of Fraud Enforcement, confirmed that cryptocurrency fraud is a top priority for the agency.

How the IRS Will Uncover Crypto Tax Evasion

According to Carolyn Schenck, National Fraud Counsel for the IRS:

• The IRS is partnering with blockchain analytics firms to identify “signatures” or red flags of fraudulent activity.

• IRS employees are training alongside Europol to enhance investigation techniques.

Agents will look for:

• Structuring transactions just below reporting thresholds (e.g., multiple $9,999 transfers)

• Use of shell corporations to disguise ownership

• Patterns of moving assets on and off blockchain networks

Taxable Events & Reporting Guidance

While guidance around cryptocurrency tax reporting has sometimes been unclear, the IRS has reaffirmed that:

• Buying virtual currency with U.S. dollars is not a taxable event and generally does not need to be reported.

• Cashing out, trading, or spending cryptocurrency is taxable and must be reported.

Operation Hidden Treasure will focus on identifying such unreported taxable events and linking them back to individual taxpayers.

What This Means for Taxpayers

The message from the IRS is clear: Crypto transactions are not invisible, and non-compliance can lead to significant consequences.

If you have crypto holdings or have engaged in transactions involving digital assets:

• Review your transaction history carefully

• Understand what constitutes a taxable event

• Ensure accurate reporting on your tax return

Questions about crypto tax compliance?
📞 Contact our office at 561-995-0064 for expert guidance on reporting, planning, and minimizing audit risks.