8962 (2020)

What is Form 8962?

Form 8962, Premium Tax Credit (PTC), issued by the Internal Revenue Service (IRS), is for certain taxpayers or their family members who are enrolled in a health plan. It gives financial assistance to enable taxpayers to pay the premiums with the help of a Marketplace or a healthcare exchange by providing a refund or reducing the tax to pay.

Form 8962 computes and determines the premium tax credit that will be subtracted from your tax return. It is exclusive to health insurance coverage in a qualified health plan. Advanced payment of the premium tax credit should also be settled upon filling out Form 8962.

Who is qualified to file Form 8962?

You are eligible to file Form 8962 with your income tax return — Form 1040, U.S. Individual Income Tax Return; 1040-SR, U.S. Tax Return for Seniors; or 1040-NR, US Nonresident Alien Income Tax Return, if any of the following situations apply to you:

• You are taking the PTC.
• APTC was paid for you or another individual in your tax family.
• APTC was paid for an individual you told the Marketplace would be in your tax family and neither you nor anyone else included that individual in a tax family.

Note: According to the Instructions section of Form 8962, a tax family consists of the following individuals:

• You, if you file a tax return for the year and you can’t be claimed as a dependent on someone else’s tax return.
• Your spouse, if filing jointly and he or she can’t be claimed as a dependent on someone else’s tax return.
• Your dependents whom you claim on your tax return.

How to fill out Form 8962?

PART I. Annual and Monthly Contribution Amount

Line 1

Enter your number of dependents or the individuals in your tax family declared in your tax return.

Line 2a

Enter the Adjusted Gross Income (AGI) or the exempt or excluded income and certain deductions.

Line 2b

Enter the combined AGI of the dependents requested to file an income tax return.

Line 3

Enter the combined amounts stated in lines 2a and 2b.

Line 4

Enter where you fall under the federal poverty line provided by the IRS. Then, mark the appropriate box to determine the federal poverty table used. You may select:

• Alaska
• Hawaii
• Other 48 states and DC

Line 5

Enter your household income as a percentage of the federal poverty line.

Line 6

Mark “No” if the amount on Line 5 is at least 100% but no more than 400% and continue to line 7. If the amount is less than 100%, review the federal poverty line to determine if you qualify for the PTC. Mark “Yes” if the amount is 401% and you are not eligible for the PTC.

Line 7

Enter the applicable figure based on your answer on Line 5.

Line 8a

Enter the estimated product of lines 3 and 7.

Line 8b

Enter the estimated quotient of lines 8a and 12.

PART II. Premium Tax Credit Claim and Reconciliation of Advance Payment of Premium Tax Credit

Line 9

If you prefer to allocate policy amounts or choose alternative calculations skip to Part IV or V. If not, continue with Line 10.

Line 10

Mark “Yes” if continuing with Line 11. If not, mark “No” and proceed with lines 12-23.

Line 11

Enter the annual computations for the following:

1. Enrollment premiums
2. Applicable SLCSP premium
3. Contribution amount
4. Maximum premium assistance
5. Premium tax credit allowed
6. Advance payment of PTC

Lines 12 to 23

Enter the monthly computations for the following:

1. Enrollment premiums
2. Applicable SLCSP premium
3. Contribution amount
4. Maximum premium assistance
5. Premium tax credit allowed
6. Advance payment of PTC

Line 24

Enter the amount from Line 11e or the sum of all amounts from lines 12e to 23e.

Line 25

Enter the amount from Line 11f or the sum of all amounts from 12f to 23f.

Line 26

Enter the net premium tax credit.

PART III. Repayment of Excess Advance Payment of the Premium Tax Credit

Line 27

Enter the difference between lines 24 and 25.

Line 28

The excess APTC you must repay may be limited to specific amounts. Refer to the amount you entered on line 5 in filling out Line 28. If the percentage you entered on Line 5 is:

• less than 200, enter $32.
• at least 200 but less than 300, enter $800.
• at least 300 but less than 400, enter $1,350.
• if you entered 400 or 401, leave it blank.

Line 29

Enter what is smaller between Line 27 or Line 28. If Line 28 is blank, enter what is on Line 27.

PART IV. Allocation of Policy Amounts

If you opt to allocate policy amounts, you are allowed to fill and skip to Part IV, but you should qualify under several allocation situations:

• Taxpayers divorced or legally separated in the previous tax year

You and your former spouse should do allocation of policy amounts on separate returns to figure your PTC and combine it accordingly with your APTC.

• Taxpayers married at year-end but filing separate returns

You and your spouse must allocate an exact and equal amount of 50% of certain policy amounts.

• No APTC

The enrollment premiums are given in proportion to the SLCSP premium that is applicable to every taxpayer’s coverage family.

• Other situations where a policy is shared between two tax families

If a different taxpayer indicated in the Marketplace that their tax family would include an individual to whom you are including in your tax family, or it is you who directly indicated such an APTC was paid on behalf of the individual.

Lines 30 to 33

These lines have the same fields to be filled out but separated to identify different allocated taxpayers.

Column a - Policy number

If the marketplace provided more than 15 numbers, enter only the last 15 numbers.

Column b - SSN of the taxpayer

Enter the SSN to whom you will be allocating policy amounts.

Column c - Allocation start month

Enter the month number you start allocating policy amounts (e.g. May, enter ‘05’).

Column d - Allocation stop month

Enter the month number you stop allocating policy amounts (e.g. May, enter ‘05’).

Column e - Premium percentage

If you are required to allocate the enrollment premiums according to your allocation situation on Form 1095-A, Health Insurance Marketplace Statement, column A of lines 21 to 32, enter your allocation percentage for that policy in column (e).

Column f - SLCP Percentage

If you are required to allocate the enrollment premiums according to your allocation situation on Form 1095-A, column B of lines 21 to 32, enter your allocation percentage for that policy in column (f).

Column g - Advance payment of the PTC percentage

If you are required to allocate the enrollment premiums according to your allocation situation on Form 1095-A, column C of lines 21 to 32, enter your allocation percentage for that policy in column (g).

Line 34.

Mark “Yes” if you have completed all policy amount allocations. See computation instructions in the form; otherwise, mark “No” and see the instructions part to report additional policy amount allocations.

PART V. Alternative Calculation for Year of Marriage

Those who would elect the alternative calculation for your pre-marriage months are the only eligible ones to fill this part.

For lines 34 and 35, both have the same required fields. Line 35 is for alternative entries for your SSN and Line 36 is for alternative entries for your spouse’s SSN.

Box a - Family size

Enter your number of dependents or the individuals in your tax family under your tax return.

Box b - Monthly contribution amount

Enter the amount paid as contribution monthly

Box c - Start month

Enter the month you start allocating policy amounts.

Box d - End month

Enter the month you stop allocating policy amounts.

Form 8962 is usually filed together with a Form 1095-A, Health Insurance Marketplace Statement, and then attached to your Form 1040, U.S. Individual Income Tax Return. Filling out Form 8962 requires a lot of computations so to avoid errors in your records, make sure to have entered correct amounts and percentages in all your forms and check every computation required.