Form 8962

What Is IRS Form 8962: Premium Tax Credit?

Form 8962 is used to calculate the amount of premium tax credit you’re eligible to claim if you paid premiums for health insurance purchased through the Health Insurance Marketplace. Claiming the premium tax credit could reduce your tax liability for the year. Completing Form 8962 can tell you how much credit you’re eligible to receive or whether you owe the Internal Revenue Service (IRS) because you received too much in advanced premium tax credit (APTC).

* Important Note:

The American Rescue Plan of 2021 reduces the cost of Marketplace plans, increases the tax credits for many Americans, and expands eligibility for the tax credits starting April 1, 2021. The average Marketplace user will pay $85 per policy less every month.

What Is Form 8962 Used for?

Advanced premium credits are paid to your health insurance plan and reduce your monthly premium payments. Form 8962 is used along with Form 1095-A to reconcile the difference between the amount of advanced premium tax credit you received and the amount of premium tax credit you’re eligible to receive, which is based on your income for the year.

This calculation matters because it determines whether or not you owe money to the IRS. If the amount of advanced premium tax credit received is less than the amount of the premium tax credit you’re eligible to receive, then you’re owed the difference. On the other hand, if the amount of advanced premium tax credit received exceeds the amount of the premium tax credit you’re eligible to claim, you owe money back to the IRS. The sum you owe could either reduce the size of your overall tax refund or mean that you have to pay money to the IRS.


Who Needs to File IRS Form 8962?

You only need to complete IRS Form 8962 if you purchased health insurance through the Affordable Care Act’s Health Insurance Marketplace. If you’re covered by a health insurance plan at work or you purchased health insurance directly from an insurance company outside of the exchange, you don’t need this form to complete your tax filing.

You Must File Form 8962 If:

-You want to claim the premium tax credit, or

-Advanced premium tax credits were paid for you or a family member covered by your plan

If you enrolled for health insurance through the Marketplace and received a Form 1095-A, you will use it to complete Form 8962. This form, called a Health Insurance Marketplace Statement, has information about your coverage, including:

- Premiums paid

- Premium tax credits used

- Who is covered under your plan

Form 1095-A is issued to you by the Marketplace, not the IRS. If you don’t get one in the mail, you should be able to view your form by logging into your Marketplace account online.

It may receive more than one Form 1095-A for the year if you changed Marketplace health insurance plans, added or removed family members from your coverage, or have more than five family members enrolled on the same plan.

How to Fill Out and Read Form 8962?

Form 8962 is a two-page form broken into five parts.

Part I is where you record annual and monthly contribution amounts using your family size, modified adjusted gross income, and household income.

Part II is where you reconcile your advanced premium tax credit received with monthly premium amounts.

Part III is used to calculate any excess advanced premium tax credit payments, based on the information you provided in Part II.

Part IV allows you to allocate policy amounts, while Part V is used for alternative calculation of your year of marriage.

Again, you need Form 1095-A to complete each section of the form, as well as your Form 1040 showing your modified adjusted gross income.

 If the information on your Form 1095-A is wrong, you need to have it corrected before completing Form 8962. You can request an updated form by contacting the Health Insurance Marketplace.

Common Questions for Form 8962 Premium Tax Credit

Q1: What Is a Premium Tax Credit?

A premium tax credit, or PTC, is a type of refundable tax credit that allows low income and middle income individuals and families cover the premiums of health insurance bought in the Health Insurance Marketplace. The Health Insurance Marketplace is an online exchange in which individuals and families can find a health insurance plan in their budget.

The size of your premium tax credit depends on your level of income, so the lower your income, the higher the tax credit you’ll receive to cover your premiums. When you participate in health insurance from the Marketplace, you can get an estimate of the credit that will be sent to your insurance, reducing the amount of the premium you pay out-of-pocket. This is known as the advanced payments of the premium tax credit, or APTC. You can also wait until you file your taxes and receive all of your credit at one time. Should you choose to make advanced payments of the premium tax credit made to insurance, you will resolve the amount with the actual credit you receive when you file your tax return. Whichever option you choose, you must file Form 8962, Premium Tax Credit along with your tax return.

Q2: What Is the Health Insurance Marketplace?

When you want affordable insurance, you can turn to the Health Insurance Marketplace for a reasonable insurance plan that fits your budget. The Department of Health and Human Resources regulates the Marketplace and includes up-to-date information on its health insurance. This is an online resource where you can find information on different types of health insurance plans, and learn more about premiums versus out-of-pocket costs you can expect from each plan.

To enroll for insurance through the Marketplace, you typically need to apply during the open enrollment period, which generally lasts between November 1 and January 31. Under special circumstances, you may be able to apply through a special enrollment period to gain health insurance.

Q3: Where to Get Premium Tax Credit Form 8962?

Form 8962 can be found on the IRS website and is free to download. If you’re filing taxes using an electronic tax filing software, this form should be generated for you as you navigate through the program’s questionnaire format. You can also free download the PDF Form 8962 on PDF Reader Pro as listed above. 

Q4: Can Form 8962 Be E-Filed?

E-filing can be convenient and take less time than completing paper tax forms. If you’re e-filing your taxes, you should be able to complete Form 8962 through the tax filing software program you’re using.

Q5: Where to Mail IRS Form 8962?

If you’re filling out a paper tax return and mailing your forms to the IRS, you include Form 8962 with your Form 1040. You then mail your forms to the IRS regional office that covers your state of residence. 

A printable Premium Tax Credit Form 8962 is available on PDF Reader Pro as listed above. It can be free downloaded and filled out with PDF Reader Pro

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