Form 8962 Instructions | Easily Claim the Premium Tax Credit (2024)

Have you signed up for health insurance through the Marketplace? If so, you may be eligible for premium tax credits that lower your monthly payments. But to claim these valuable credits, you must file form 8962 when youfile your tax return.

This critical tax form reconciles the premium tax credit payments you receive during the year with the final amount you’re eligible for based on your modified adjusted gross income. Please complete it correctly to avoid losing out on credits that could potentially increase your refund or reduce your tax liability.

In this comprehensive guide, we’ll explain everything you need to know about Form 8962, from how premium tax credits work to step-by-step instructions for filling it out accurately.

Form 8962is the official IRS form used to reconcile your advance premium tax credits with the amount you qualify for.

The advance premium tax credit helps make the health insurance marketplace affordable by lowering your health insurance premiums. When you apply, your estimated credit is calculated based on predicted income and family size for the tax year.

You can choose to:

• Get the advance payment of premium tax credit to reduce monthly payments
• Claim the entire credit during tax filing

The formensures you get the proper credit amount based on your final figures for the year. Failing to file it can mean that the IRS won’t process your tax return, potentially losing hundreds or thousands in credits!

Now, let’s look at how the credit works in more detail.

• Eligibility is based on your projected household income and size.
• You can choose advance payments to lower your monthly premium amounts.
• These advancesare just estimates.
• It reconciles your exact credit based on final income data.
• If your final amount is higher, you get money back or a reduced tax liability.
• If you received excess advance premium tax credit, you may owe repayment, subject to limits.

If you received advance premium tax credits (APTC) or any premium tax credits (PTC) to help pay for a Marketplace health insurance plan, this form is a crucial tax form you must file. Use form 8962 to reconcile the amount of premium tax credits you received with the actual amount you qualify for based on your final household income and family details for the year.

Filing it with your annual federal income tax return calculates the premium tax credit you can claim. You don’t need the form if you:

• Bought insurance outside the Marketplace
• Had employer coverage all year
• Had Medicare or Medicaid only

Yes! If your household income or size changed during 2022 in ways that qualify you for more credit, filing Form 8962 allows you to get the additional premium tax credit you have coming.

For example, suppose your income ended up lower than estimated, or you added a dependent. In that case, your actual credit will likely exceed advance payments of the premium tax.

Yes, the IRS understands that errors in estimated income can happen. Under the American Rescue Plan Act, repayment limits exist based on your household income if you received too much advance credit:

• Under 200% of the federal poverty level – no repayment
• Between 200-400% – capped repayment
• Over 400% – full repayment

So, your repayment may be reduced or eliminated based on your final 2022 income.

Here are valuable reasons to get it right:

• Receive your full premium tax credit amount
• Avoid owing the IRS for excess advance payments
• Maximize your tax refund
• Prevent tax return delays or penalties
• Verify information on your form 1095-A

Getting every dollar you deserve makes Form 8962 well worth your careful attention.

Some common errors to sidestep when filing include:

• Forgetting to attach it to your Form 1040
• Using incorrect income amounts
• Missing a family member on the form
• Entering premium details inaccurately
• Using outdated form versions

Consult a tax expert if you need assistance!