This amount is the total of your enrollment premiums for the month, including the portion paid by APTC. Mike and Susan enroll together in a qualified health plan through the Marketplace. They receive a Form 1095-A, which reports $800 for the enrollment premiums in column A on lines 21 through 32 and $850 for the applicable SLCSP premium in column B on lines 21 through 32 for January through December. They check “Yes” on Form 8962, line 10, and complete line 11 because for each of columns A and B there is an amount for all 12 months and the amounts did not change. Henry enrolled himself, his spouse Cara, and their two dependent children, Heidi and Matt, in a policy for 2024 purchased through a Marketplace. Henry purchased different health insurance for himself through a Marketplace for July through December.
- When you enroll in Marketplace insurance, you can choose to have the Marketplace compute an estimated credit that is paid to your insurance company to lower what you pay for your monthly premiums (advance payments of the Premium Tax Credit, or APTC).
- Follow the instructions below for each column, using Worksheet III from IRS Publication 974.
- Elvis’ employer coverage is considered unaffordable for the period May through December because his required contribution for the full plan year, $2,400, is more than 8.39% of his household income.
- No, your dependent’s receipt of, or approval to receive, unemployment compensation during 2021 does not cause you to meet the household income limits for Premium Tax Credit eligibility or make you an applicable taxpayer.
Comprehensive Payroll Tax Guide for Employers
In addition, if you or your family member enrolls in employer-sponsored coverage for a month, you or your family member is considered eligible for employer-sponsored coverage for that month, even if the coverage does not satisfy the affordability and minimum value standards. Finally, if your employer offered coverage for you but not your family, you may be able to take the PTC for your family members. For more information on affordability and minimum value, see Pub. Your employer coverage is generally considered affordable for you if your share of the annual cost for self-only coverage, which is sometimes referred to as the “employee required contribution,” is not more than 8.39% of your tax family’s household income for 2024. For 2025, this annual cost threshold will increase to 9.02%. See Determining affordability at the time of enrollment, later, for more information on this rule.
- HHS has designated the following health benefit plans or arrangements as MEC.
- These tools consider your income, household size, and the cost of available health plans to provide an estimate of your potential credit.
- Mistakes can happen, and if you discover an error on your Form 8962 after filing, it’s possible to amend the form to correct the information.
- You may use the percentage you agreed on for every month that this allocation rule applies, or you may agree on different percentages for different months.
IRS Form 8379 Instructions
This flowchart can help you determine whether you can take the PTC. Be sure you read Who Can Take the PTC, earlier, or in the Form 8962 instructions. Based on the numbers, the IRS will either reduce your tax bill or ask you to pay back part of the advance credit.
Column (a): Monthly enrollment premiums
If your correct applicable SLCSP premium is not the same for all 12 months, check the “No” box and continue to Lines 12 through 23. Follow the instructions in Table 4 below to determine whether you qualify for the alternative calculation. You can use Worksheet 2-1, located in the Form 8962 instructions to calculate your dependents’ MAGI. For your convenience, we’ve included the steps, line by line, below. IRS.COM is a non-government website designed to help taxpayers find accurate, easy-to-understand tax information, valuable tax products, and tax-related services. We strive to be the most user-friendly tax-related platform.
The IRS will then request Form 8962 to verify the correct credit calculation. Form 8962 calculates the difference between the estimated income used to determine the APTC and the actual income reported. If the form is missing, incomplete, or contains errors, the IRS may request it before processing the return. This ensures taxpayers receive the correct financial assistance and prevents unexpected tax bills.
West Virginia State Tax Rate & Return Complete Guide
The Premium Tax Credit (PTC), also known as APTC for its advance payment option, is a lifeline for individuals and families striving to afford health insurance. This refundable tax credit eases the financial burden of premiums for those purchasing insurance through the Health Insurance Marketplace. You can either reduce your monthly premiums through advance payments or claim the full credit when filing your federal income tax return. If this allocation situation applies, the enrollment premiums are allocated in proportion to the SLCSP premium that applies to each taxpayer’s coverage family.
Use this form and its instructions to determine any amount of the self-employed health insurance deduction you may be able to claim and report on Schedule 1 (Form 1040), line 17. If Form 8962 is not included with a tax return, the IRS will place the filing on hold and issue a Letter 12C requesting the missing documentation. This delay can be frustrating for those expecting a refund, as the IRS will not process the return until the form is received and reviewed. Taxpayers who fail to respond risk having their return adjusted, potentially resulting in the disallowance of the Premium Tax Credit and a higher tax liability. If a taxpayer updates their Marketplace application mid-year due to changes in coverage or eligibility, the reported APTC amounts may differ from the original estimates. For instance, switching plans or having coverage gaps can lead to subsidy adjustments that are not reflected accurately on the return.
Form 8962 for Marketplace Insurance
Thus, there are no months when Andrew’s coverage family is the same (except for Anne) before and after Anne is disenrolled from coverage. Andrew must look up the SLCSP premium that applies to his coverage family without Anne. Andrew determines that the correct applicable SLCSP premium to enter on Form 8962 for the months January through March for a coverage family consisting of Andrew, Terri, and Phil is $900. Maria’s employer offers health insurance coverage with a plan year of September 1 through August 31.
Allocation Among Taxpayers Who Are Married But Not Filing a Joint Return and One or More Other Taxpayers
When refiguring the PTC, use all enrollment premiums for qualified health plans in which you or any individual in your tax family enrolled. Determine AGI, modified AGI, premium tax credit, form 8962 and household income using the amount from line 11 of the Step 3 Worksheet as your self-employed health insurance deduction. Use Worksheets 1-1 and 1-2 in the Form 8962 instructions to figure modified AGI and household income.
Yes, if you purchased health insurance through the Marketplace and want to claim the PTC. Before you dive into Part I, write your name and Social Security number at the top of the form. Part I is where you enter your annual and monthly contribution amounts. You’ll enter the number of exemptions and the modified adjusted gross income (MAGI) from your 1040 or 1040NR. Only those who have health insurance through the Affordable Care Act Health Insurance Marketplace (also known as the exchange) are eligible to use Form 8962, and not everyone who has marketplace coverage can qualify. If you used healthcare.gov or your state’s health insurance exchange to get coverage, you may qualify.
