If you got too high a subsidy or too low, it gets reconciled at tax time on form 8962. Scroll down or click icon on your right to get the form from the IRS website. If your subsidies were too high you may have to pay penalties, if too low, you can get a tax refund or lower the amount you have to pay. In a lot of ways, IMHO subsidies are hocus pocus, jiggery pokery – smoke and mirrors as it’s all guesswork and promises.
Form 8962 Premium Tax Credit
Reconciliation Form attaches to 1040
Subsidy is IMHO hocus pocus - smoke & mirrors
it all comes out when you file taxes!
Our webpage on Form 8962 - Premium Tax Credit Subsidy Reconciliation
but first you need the Proof of Coverage Form 1095 A from Covered CA
and B if applicable – like if you had Covered CA part of the year and other coverage the rest of the year, from an Insurance Company, Government – Like Medicare or Medi-Cal or your Employer.
When you are done completing # 8962, enter the calculation on line 46 and/or 69 of 1040 form.
Schedule 1 Additional Income & Adjustments to Income
Do you think this process is complicated?
- H & R Block
- Estimate the Subsidy for Health Insurance, benefits, premiums, etc.
- 8962 ONLINE Calculator
Tax Return Deadline
H & R Block advises to file a return and reconcile your credit by April 18, or request an extension so you have more time to file your taxes. An extension will give you until October 17 to file your return and reconcile any credit you received through Covered CA
Will I have to file a federal income tax return to get the premium tax credit?
Yes. For any tax year, if you have APTC in any amount or you do not have APTC but you plan to claim the premium tax credit, you must file a Form 8962, and attach it to your federal income tax return for that year. If you have any APTC, you will use Form 8962 to reconcile the difference between the APTC made on your behalf and the actual amount of the credit that you may claim on your return. This filing requirement applies whether or not you would otherwise be required to file a return.
If APTC is made on behalf of you or an individual in your family, and you do not file a tax return, you will not be eligible for APTC or cost-sharing reductions to help pay for your Marketplace health insurance coverage in future years. This means that you will be responsible for the full cost of your monthly premiums. IRS.gov
CFR 155.305 (f) (4)
Compliance with filing requirement.
(i) Covered CA may not determine a tax filer eligible for advance payments of the premium tax credit if HHS notifies the Exchange as part of the process described in § 155.320(c)(3) that advance payments of the premium tax credit were made on behalf of the tax filer or either spouse if the tax filer is a married couple for a year for which tax data would be utilized for verification of household income and family size in accordance with § 155.320(c)(1)(i), and the tax filer or his or her spouse did not comply with the requirement to file an income tax return for that year as required by 26 U.S.C. 6011, 6012, and implementing regulations and reconcile the advance payments of the premium tax credit for that period.
(ii) Notwithstanding the requirement in paragraph (f)(4)(i) of this section, the Exchange may not deny eligibility for advance payments of the premium tax credit under paragraph (f)(4)(i) of this section unless direct notification is first sent to the tax filer, consistent with thestandards set forth in § 155.230, that his or her eligibility will be discontinued as a result of the tax filer‘s failure to comply with the requirement specified under paragraph (f)(4)(i) of this section.