If you purchase health insurance on the Health Insurance Marketplace, you must file Form 8962
If you have purchased your health insurance on the Health Insurance Marketplace and got a reduction in payments then you got a Premium Tax Payment. And that must be accounted for on your tax return. Failing to file Form 8962, Premium Tax Credit, to reconcile 2019 advance payments of the premium tax credit may affect return processing, and delay the taxpayer’s refund. You may also not be eligible for advance payments of the premium tax credit in the future if you fail to file the form with your return.
What is the premium tax credit?
The premium tax credit helps pay for health insurance coverage bought from the Health Insurance Marketplace. When the taxpayer or their family member applies for coverage, the marketplace estimates the amount of the premium tax credit they may be able to claim. This estimate is based on information the taxpayer provides about family size and projected household income. The taxpayer can then decide if they want to have all, some, or none of the credit paid directly to their insurance company. This option will lower their monthly payments.
Who is required to file Form 8962 to reconcile advance payments?
Taxpayers who have advance credit payments made on their behalf, are required to file Form 8962 with their income tax return. This will reconcile the amount of advance payments with the premium tax credit they may claim based on their actual household income and family size.
How do taxpayers know they received advance credit payments?
Taxpayers or members of their family who enrolled in health insurance coverage for 2019 through the marketplace should receive Form 1095-A, Health Insurance Marketplace Statement. This form shows the months of coverage and any APTC paid to the taxpayer’s insurance company.
This form also provides information to complete Form 8962. Taxpayers who have questions about the information on Form 1095-A, or about receiving it, should contact their marketplace directly. The IRS can’t answer questions about information on Form 1095-A or about missing or lost forms.
How does a taxpayer reconcile advance credit payments?
Filing electronically is the easiest way to file a complete and accurate tax return. Taxpayers who received advance credit payments must file a tax return to reconcile even if they otherwise don’t have to file.