How to File Form 8962: Step-by-Step Instructions

If the website does not have an applicable SLCSP premium tool, you will need to contact the state-based Marketplace directly for the correct SLCSP premium. He checks the boxes for January, February, and March because those are the months in which Anne is enrolled in Marketplace coverage. If line 27 is not more than your amount from Table 5 in the Form 8962 instructions, do not complete Worksheet B. Leave line 28 of Form 8962 blank, enter the amount from line 27 on line 29, and follow the instructions for line 29.

Step 1: Gather Necessary Information

If neither exception applies, see Married filing separately (not in Exception 2—Victim of domestic abuse or spousal abandonment), later. If you elected the alternative calculation for year of marriage, and line 24 is greater than line 25, enter -0- on line 26 and skip lines 27 through 29. Enter the annual applicable SLCSP premium from Form 1095-A, line 33, column B. If you have more than one Form 1095-A, enter the amount as follows. You may qualify for the PTC if your household income is less than 100% of the federal poverty line and you meet all of the following requirements.

Texas State Tax Rate & Return Complete Guide

• However, you must use the same allocation percentage for all policy amounts (enrollment premiums, applicable SLCSP premiums, and APTC) in a month.
• A coverage period in 2024 that falls in a plan year beginning in 2023 is considered affordable if your required contribution for the entire plan year is not more than 9.12% of your household income for 2024.
• Your employer is required to provide you with a document called a Summary of Benefits and Coverage.
• Don did not return to the Marketplace to determine if he was eligible for APTC for the months September through December 2024 and remained enrolled in the qualified health plan.

His required contribution for the plan year that began on July 1, 2023, was $250 per month ($3,000 for the entire plan year). Tim enrolled in a qualified health plan on January 1, 2024, and did not apply for APTC. Tim’s required contribution for the plan year, $3,000, is 10% of his household income for 2024.

• Leia does not qualify as Vince’s dependent under those rules because Leia did not live with Vince for more than half of 2024.
• If you have more than one Form 1095-A showing coverage in a particular month, use the following rules to determine the amounts to enter on Form 8962, column (b), for that month.
• Tim’s employer offers health insurance coverage with a plan year of July 1 through June 30.
• The difference between the benchmark plan premium and the taxpayer’s expected contribution determines the monthly premium tax credit.
• You can prepare the tax return yourself, see if you qualify for free tax preparation, or hire a tax professional to prepare your return.
• Understanding the detailed instructions for Form 8962 is essential for accurate filing.

If your allocation situation requires you to allocate the applicable SLCSP premium on Form 1095-A, lines 21 through 32, column B, enter your allocation percentage for that policy in column (f). Enter your allocation percentage as a decimal rounded to two places (for example, for 67%, enter “0.67”). You will enter an allocation percentage in column (f) in the following two premium tax credit, form 8962 circumstances. For example, if you were enrolled in a policy with your former spouse from January through June, enter “01” in column (c).

If you, your spouse, or a dependent was enrolled in a Marketplace health plan, you will receive this form. You must file Form 8962 with your tax return, even if you do not normally file, because the advance payments you received were based on an estimated income and must be reconciled with your actual income. Reconciling advance credits ensures taxpayers align advance payments with their actual eligibility.

How to File Back Taxes and Manage Owing the IRS

In Part III, we’ll determine how much, if any, excess advance premium tax credit repayments you have to report on Schedule 2 and repay when filing your federal return. However, the APTC is based on estimated household income, meaning you must reconcile it when you file your tax return using Form 8962. If your actual income is higher than you estimated, you may need to repay excess advance PTC payments. If it is lower, you may be eligible for additional PTC, which could increase your tax refund. When you buy health insurance from the Marketplace, you need to provide information about your family size and income to determine your premium tax credit eligibility. During the year, you may experience changes in income that differ from what you expected when filling out the Marketplace application.

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Don did not return to the Marketplace to determine if he was eligible for APTC for the months September through December 2024 and remained enrolled in the qualified health plan. The Marketplace determination does not apply, however, for the months September through December of 2024 because Don did not provide information to the Marketplace about his new employer’s offer of coverage. Whether Don is considered eligible for employer-sponsored coverage and ineligible for the PTC for the months September through December of 2024 is determined under the eligibility rules described under Employer-Sponsored Plans in Pub. To qualify for a monthly credit amount, at least one individual in your tax family must be enrolled in a qualified health plan on the first day of that month. Generally, if coverage in a qualified health plan began after the first day of the month, you are not allowed a monthly credit amount for the coverage for that month. Therefore, the individual may be a member of your tax family and coverage family for the entire month for purposes of computing your monthly credit amount.

Q21. What if the retiree coverage consists of a retiree-only health reimbursement arrangement (HRA)?

Also, if you had a change in circumstances during 2024 that you did not report to the Marketplace, the SLCSP premium reported on Form 1095-A in Part III, column B, may be wrong. See Missing or incorrect SLCSP premium on Form 1095-A under Line 10 in the Form 8962 instructions. In either case, you must determine your correct applicable SLCSP premium. You do not have to request a corrected Form 1095-A from the Marketplace.

To complete Form 8962, you’ll need information from Form 1095-A, Health Insurance Marketplace Statement. Form 1095-A provides details about your health insurance premiums, monthly premium amounts, and the Second Lowest Cost Silver Plan (SLCSP), which are needed to calculate your PTC. Form 8962 is also used to reconcile the premium tax credit you might be eligible for with any advanced premium tax credit payments you’ve already received.

Failing to file your tax return for tax years other than 2020 may prevent future advance credit payments

If you have missing or incorrect SLCPS premium information, then you will have to determine the correct applicable SLCPS, and whether it remains the same for each month. There are two tax situations in which incorrect information might be reported to you on IRS Form 1095-A. You may use Worksheet 2 from the form instructions to calculate your household income as a percentage of the federal poverty line (see below). Form 8962 is directly connected to the Affordable Care Act and the Health Insurance Marketplace. It requires accurate information from Form 1095-A, which is provided by the Marketplace and contains details about your coverage and APTC.

Because Paulette and Quentin checked “No” on line 10, they skip line 11 and complete lines 12 through 23 to figure their monthly PTC. For the months you were married for the entire month, enter the smaller of column (a) or (d). After you have completed Steps 1 and 2 and/or Steps 3 and 4, complete Worksheet V to determine what entries you must make on Form 8962, lines 12 through 23, for your pre-marriage months.

Penalty for Filing Taxes Late: Avoid Late Tax Filing Penalties

Claiming a net PTC will lower the amount of tax you owe or increase your refund to the extent it is more than the amount of tax you owe. For tax years 2021 through 2025, Congress temporarily expanded eligibility for the Premium Tax Credit by eliminating the requirement that a taxpayer’s household income may not be more than 400 percent of the federal poverty line. Under this rule, taxpayers with household income of more than 400 percent of the federal poverty line for their family size may be allowed to claim a Premium Tax Credit, if otherwise eligible (see Q5).

I’m a dad, husband, Certified Financial Planner, tax practitioner, retired Navy veteran, and writer. I love to write articles on financial topics and IRS tax forms. I especially like to explore financial planning subjects that no one else has tackled before, and help people with financial questions they haven’t found the answers to.