The Sharp Corners of ACA Premium Tax Credit Provisions

163 Tax Notes 2001 (June 24, 2019)

7 Pages Posted: 31 Jul 2019

See all articles by Bryan Camp

Bryan Camp

Texas Tech University School of Law

Date Written: June 24, 2019


The Tax Court has started issuing more and more opinions dealing with disputes over the proper application of the Premium Tax Credit Provisions in §36B. Those opinions show that the Court views §36B as containing no wiggle room to deal with reasonable taxpayer errors in calculating their Premium Tax Credit (PTC). Multiple times one sees the Court writing phrases such as “We are not unsympathetic to petitioners’ plight; however, we are bound by the statute,” and “we cannot ignore the law to achieve an equitable end.”

The Court's doggedly textualist reading results in taxpayers getting hit with really big deficiencies, even when the error is someone else’s fault. Recent cases have done this, turning receipt of lump sum SSDI payments into a “gotcha” game that even reasonable taxpayers will lose if they make the §86(e) election to attribute a lump sum payment ratably over prior years.

In the recent fully reviewed case of Johnson v. Commissioner, the question was whether an SSDI lump sum catch-up payment had to be counted in calculating PTC eligibility when the taxpayers had made an election under §86(e) to reallocate the lump-sum payment from current year into prior years. The Court looked at the text of §36B and said “yep, gotta include the lump sum.”

This article argues that a closer look at the §36B language suggests there is room for an interpretation consistent with the §86(e) policy. While the interpretive choice made by the Court was understandable, it was not inevitable. This article explains why.

Keywords: SSDI, 86(e), ACA, lump-sum election, Premium Tax Credit, Advance Premium Tax Credit, PTC, APTC

JEL Classification: K32, K34, K4

Suggested Citation

Camp, Bryan T., The Sharp Corners of ACA Premium Tax Credit Provisions (June 24, 2019). 163 Tax Notes 2001 (June 24, 2019). Available at SSRN:

Bryan T. Camp (Contact Author)

Texas Tech University School of Law ( email )

1802 Hartford
Lubbock, TX 79409
United States

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