What Is IRS Form 8962?

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 if you owe the Internal Revenue Service (IRS) because you received too much in advanced premium tax credit (APTC).

Key Takeaways

  • Form 8962 is used to estimate the amount of premium tax credit for which you’re eligible if you’re insured through the Marketplace.
  • You only need to complete Form 8962 if you received advance payments of premium tax credits for health insurance premiums paid.
  • Receiving too much in advanced premium tax credits could result in you owing money to the IRS when you file your tax return.

Who Needs IRS Form 8962?

You would 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,” includes 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’s possible that you could 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.

If you received a Form 1095-B from your insurance company or a Form 1095-C from your employer, you don’t file Form 8962.

What Is Form 8962 Used For?

Advanced premium credits are paid to your health insurance plan and help to 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.

IRS Form 8962

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 for 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.

Where to Get 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.

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.

Where to Mail 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. The IRS offers a helpful table that breaks down where to send your Form 1040 and any accompanying forms, such as Form 8962, on its website.