IRS  Premium Tax Credit

Form #8962

 

is used to reconcile the APTC Advance Premium Tax Credit


subsidy with your IRS # 1040.

If you got too high a subsidy or too low, it gets reconciled at tax time on form 8962. Scroll down 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.  Be sure to report income and household changes within 30 days.

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!

8962 Subsidy Reconciliation

More Instructions

See form 2210 Underpayment of tax and the instructions for more details.   

Form # 8962 Instructions  HTML  *  pdf  *

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?

​2019 1040 Form   

#Line8b Adjusted Gross income then add line 2a, 5a &

7a (Foreign Income)

to get Covered CA MAGI Income

irs 1040 magi income covered ca

 

2019 Schedule 1  Additional Income & Adjustments to Income

IRS #Pub974 

Premium Tax Credit
IRS Publication 974

VIDEO What is APTC Advance Premium Tax Credit

 

aptc interactive assistant

Interactive Tax Assistant (ITA)

Am I eligible to claim the Premium Tax Credit? 

IRS FAQ on Premium Tax Credit

 

Tax #Estimators

 

 

ACA What You Need To Know  #5187 ACA What you need to know # 5187

Health Net VIDEO
How to get subsidies – pay less for coverage 

 
 
Kaiser Foundation reports that 27% of uninsured individuals are eligible to purchase a bronze plan with $0 premiums after subsidies in 2019.  Silver plans with cost-sharing reductions (CSR) for single individuals with incomes below 200% of the poverty level can be purchased for roughly $20 to $130 per month after subsidies, depending on an enrollees’ income. KFF *

Insure Buy International Medical Coverage

InsuBuy International Medical Coverage – Instant Quotes & Enrollment

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
1040 instructions

Requirement To Reconcile Advance Payments of the Premium Tax Credit

The premium tax credit helps pay premiums for health insurance purchased from the Marketplace. Eligible individuals may have advance payments of the premium tax credit made on their behalf directly to the insurance company.

If you or a family member enrolled in health insurance through Covered CA  and advance payments of the premium tax credit were made to your insurance company to reduce your monthly premium payment, you must attach Form 8962 to your return to reconcile (compare) the advance payments with your premium tax credit for the year.

Covered CA  is required to send Form 1095-A, listing the advance payments and other information you need to complete Form 8962.

1. You will need Form 1095-A from the Marketplace.
2. Complete Form 8962 to claim the credit and to reconcile your advance credit payments.
3. Include Form 8962 with your Form 1040, Form 1040-SR, or Form 1040-NR. (Don’t include Form 1095-A.)

 

For an introduction - See the  general explanation of subsidies and how they work.

If you  received premium assistance you MUST file taxes.

When you file, the IRS will check to see if the amount of income you  reported to Covered California is the same as the amount of income they actually made.  The IRS will also check to see if their family size is the same as when they applied.  The IRS will compare, or “reconcile,” the amount of premium assistance they qualify for based on their actual income and family size reported on their tax return with the premium assistance they received during the taxable year.

Enrollees who experienced a change in income or household size but have not reported this information to Covered California are at risk of having to pay more at tax time.   If needed, Covered California or us as your agent, no extra can work with these enrollees to reduce their current premium assistance to minimize this consequence.  Just use the button above to get a quote.

Subsidy might have to be paid back at tax time,   if new income not reported.  LA Times 9.9.2013

CNN 4.27.2015 reports that H & R Block reports average refund lowered by $729 due to under reporting MAGI income.

1.12.2015 CA Health Line on ACA and tax issues if there is a change in income.

 

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)
Eligibility Standards

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. 60116012, 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.

16 comments on “8962 Premium Tax Credit APTC Form attaches to Form 1040

  1. I didn’t make changes to my subsidy amounts, income, family filing status, dependents, etc. due to illness.

    What is the criteria to get an exemption and fix the issues now?

    • ACCEPTED:

      Fear of IRS.
      Taxpayer who had been laid off was overwhelmed by Schedule C instructions. As a result he just shut down and stopped filing for several years as the fear and anxiety mounted. He hired a CPA (Weston) to get his books in order. Once all returns were filed and taxes assessed, the IRS abated all penalties, because they agreed that the taxpayer had no malicious intent.

      Health issues.
      Prolonged illness made it difficult to concentrate, and short-term memory suffered.

      Mourning.
      Grief due to death of a close family member.

      Burglary.
      House was robbed and family computer with all records was stolen

      ONE FREE PASS:

      But before taxpayers go groveling with excuses, they have another, guilt-free option: the first-time penalty abatement waiver. Apparently the IRS has a warm and fuzzy side, because it believes that everyone is entitled to one mistake. So if you’ve got a clean record — you’ve filed (or filed a valid extension for) all required returns and are all paid up — you can qualify for the FTA waiver.
      USA Today

      *****************

      Reasonable Cause

      The key word here is “reasonable,” and it doesn’t include, “I forgot.” If you ask for a waiver for reasonable cause, you need to establish the facts for the issue you are having that keeps you from taking care of your taxes, and you need to produce documentation to back it up.

      Fire, natural disaster, casualty, or other serious disturbances count as reasonable cause. Plenty of people in the U.S. have been hit with extreme weather, devastating forest fires, and other issues over the past year or so. If your home or business is in a riot zone, you may receive a waiver since having your structure blocked off by police tape is probably considered a pretty serious disturbance.
      If you are unable to obtain your records, the IRS may grant a waiver.

      Death, serious illness, incapacitation, or unavoidable absence of you, the taxpayer, or a member of your immediate family is considered reasonable cause. It’s pretty cool of the government to acknowledge that dead people would have a tough time taking care of their taxes.
      Other reasons establishing you used all “ordinary business care and prudence” to meet your Federal tax obligations but just couldn’t do it. “I forgot” does not, unfortunately, count as reasonable care and prudence. Neither does lack of funds unless the reason for the lack meets reasonable cause criteria.

      Top Tax Defenders.com

      IRS Website on Penalty Relief due to Reasonable Cause

    • One of the problems was that our child moved out, got a good job and filed his own taxes. Is there a way we can fix that on our tax return?

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