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IRS Form 8962 [Calculate Premium Tax Credit]

Some taxpayers qualify for a premium tax credit, but they need to file an IRS Form 8962 to start the tax credit process properly.

RELATED: Tax Relief For Deserving Americans | Do You Qualify?

In this article:

  1. What Is IRS 8962 Form?
  2. IRS Form 8962 Instructions: How to Fill out Form 8962?
  3. What Will Happen to the 8962 Form If There Are Changes During the Year of Effectivity?
  4. Other Important Points to Keep in Mind About IRS Form 8962

IRS Form 8962 | What You Need to Know

What Is IRS 8962 Form?

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A man reviews bills while using a calculator.
A taxpayer who completed the enrollment in the Health Insurance Marketplace can apply for a tax credit. To start the process as well as the calculations, the taxpayer should accomplish the necessary IRS forms.

Do You Qualify For IRS Back Tax Relief? Take The Quiz Now!

The form in question is the IRS 8962 form.

Some tax professionals call it the IRS health insurance form 8962 since the form kickstarts the process for receiving a valuable tax credit for households with little to moderate income levels.

This premium tax credit is immensely useful. Usually, if the tax deadline is near, any tax credit and refund may be offset to pay tax liabilities or other debts petitioned by any lender.

However, filling out the IRS Form 8962 properly can be stressful. Figuring out which forms you need and what credits and breaks you qualify for can be confusing.

For those who buy a healthcare plan through the Health Insurance Marketplace, your healthcare needs to be considered.

To properly submit your taxes, learn more about what IRS Form 8962 is about here.

The government offers some people a Premium Tax Credit. This is called PTC.

People who buy a plan through the Health Insurance Marketplace may qualify.

The Form 8962 calculator will let you determine your PTC. Once you know your PTC, you can settle it with Advance Premium Tax Credit.

However, before we talk about the specifics of how to answer the IRS 8952 form, we should talk about how one can qualify.

  1. He or she must have their income levels within the range found at the US Health and Human Services. Specifically, their income should be within 100 to 400 percent of the federal poverty guidelines for the year and the number of dependents and members in the family.
  2. Do not file for a separate filing if the taxpayer is a spouse. There are exemptions, like spousal abuse or living separately from the spouse.
  3. The taxpayer is not a dependent, at least in reports for tax status and filing, of another taxpayer.
  4. Has enrolled in the marketplace successfully. The taxpayer should have already paid premiums and not qualify for eligible programs like Medicare, or are under an insurance policy by their employer.

IRS Form 8962 Instructions: How to Fill out Form 8962?

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A couple smiles while looking at a tablet together.
If you need IRS 8962 form instructions, here is the information you need to know.

First step: You need to get IRS Form 8962 from the Department of the Treasury, IRS, or through various online portals where you can download it as a PDF.

Second step: Next, you need to enter your basic information. This includes your formal legal name and your Social Security number.

Third step: You are now working on Part I of the form. You need to know how to fill out Form 8962 with 1040-EZ.

From Form 1040 or 1040A, you can get your exemptions to enter on line 1. You can then enter your Adjusted Gross Income (AGI) to find your total household income.

Fourth step: Use this information to see how your income compares to the Federal Poverty Level.

If you enter 401 percent for this section, you will not be able to use PTC. If you did not, then you will get some PTC.

Fifth step: You now need to fill in more information to calculate your PTC. This is Part II of the form.

Select the right options for lines 9 and 10 and then fill in your monthly amounts on the table below line 11. You then take these amounts and enter them in Part III.

Find helpful information about your health insurance policy on IRS Form 1095-A. This form is your Health Insurance Marketplace Statement.

IRS Form 1095-B is also helpful.

This form provides information about the type of coverage you have. It also details your dependents on the policy and your coverage from the previous year.

Do You Qualify For IRS Back Tax Relief? Take The Quiz Now!

If you want more IRS Form 1095-A instructions, you can go to your HealthCare.gov account. This will help you find your applications and find your coverage information.

You must have received Form 1095-A from the Marketplace. If you have not, you need to contact them.

Sixth step: In this step, you can see if you had any excess for an advance payment of the PTC. You need to fill in the appropriate amounts on these lines.

This shows how much PTC you received compared to how much you are eligible for. You then know if you received too much.

Seventh step: You are ready to complete Parts IV and V. There are more tables now.

Fill in more information about your policy and your family. For those who find this process confusing, Form 8962 TurboTax is also an option.

TurboTax helps you fill in the form as long as you supply it with all the necessary information.

RELATED: Where Is My Tax Refund? Troubleshooting Tips For Receiving Your Refund

What Will Happen to the 8962 Form If There Are Changes During the Year of Effectivity?

During enrollment and receipt of the premium tax credits for the year, a taxpayer may undergo financial changes. These changes can mean a lower or higher premium taxes, and even disqualification especially if the taxpayer reaches more than 400% of the federal poverty rate.

Since there is a lag between the reporting for the application using the 8962 form and the receipt of the premium tax credit by the taxpayer, the taxpayer may have tax debt if he or she assumed the same tax credit amount.

Examples of changes include:

  1. Divorce or marriage
  2. An increase or decrease in income from employment
  3. Cancellation or forgiveness of a debt
  4. Increase or decrease of Social Security benefits, like getting coverage from the Social Security Disability Insurance program
  5. Activation of a retirement plan, wherein income from IRA distributions pushes the taxpayer’s income levels
  6. Adoption or birth of a new dependent family member
  7. Receiving or losing healthcare coverage, whether from the government or from an employer
  8. Changes in household status, like the death of a member or change of address to another state with a lower or higher poverty standard.

The earlier the taxpayer reports the change to the IRS, the lesser the chances of messing up the schedule of the premium tax credit.

If the taxpayer receives a premium tax credit but later on gets disqualified while still receiving the financial help, the IRS can collect the excess.

Collection by the IRS can be in the form of a tax offset or sending a new tax bill.

Other Important Points to Keep in Mind About IRS Form 8962

There are a few other important points to keep in mind about this form. If ‘alien resident’ best describes your legal classification, you are not able to take advantage of Medicaid.

This also includes those who have incomes that fall below the federal poverty line.

To be able to take advantage of the PTC if your income falls below the federal poverty line, you need to meet the following qualifications:

  1. The person who registered for the health plan is in the country legally and does not qualify for Medicaid.
  2. You purchased your plan through the Marketplace. This includes plans found on Healthcare.gov as well as plans on the marketplaces through the various states.
  3. Your PTC is estimated based on your past income and your estimated income for this year. If your income changes dramatically, you might find your PTC does as well. This might result in you owing money at tax time.

The IRS fax number for 8962 form is 1-855-204-5020.

Filling out Form 8962 and finding an example of Form 8962 filled out can feel stressful. Organizing your documents and carefully going through the forms ensures you receive the returns you need and deserve. Follow these steps carefully and prepare for this year’s taxes. Here’s where you can download the form.

The IRS form 8962, as well as its calculations, can seem complex to the public. For those who are still struggling, talking to a tax advocate specialist may help taxpayers find answers as well as better options available.

Do you have any suggestions for filling out Form 8962? Share your thoughts in the comments section below.

If you owe back taxes, visit taxreliefcenter.org for more information on tax relief options.

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Editor’s Note: This post was originally published on April 5, 2018, and has been updated for quality and relevancy.