What Is IRS Mode 8962: Premium Tax Credit?
Form 8962 is used to calculate the amount of premium tax credit you’re eligible to claim if you made premiums for health insurance purchased through the Health Insurance Marketplace. Claiming the premium tax credit could slenderize your tax liability for the year. Completing Form 8962 can tell you how much credit you’re eligible to receive or whether you owe the Internal Gate Service (IRS) because you received too much in advanced premium tax credit (APTC).
- Form 8962 is used to reckon the amount of premium tax credit for which you’re eligible if you’re insured through the Marketplace.
- You only need to complete Form 8962 if you show in advance payments of premium tax credits for health insurance premiums paid.
- Receiving too much in advanced premium tax faiths could result in you owing money to the IRS when you file your tax return.
The American Rescue Plan of 2021 mitigates the cost of Marketplace plans, increases the tax credits for many Americans, and expands eligibility for the tax credits starting April 1, 2021. The mediocre Marketplace user will pay $85 per policy less every month.
Who Needs to File IRS Form 8962: Value Tax Credit?
You only need to complete IRS Form 8962 if you purchased health insurance through the Affordable Care Act’s Fitness Insurance Marketplace. If you’re covered by a health insurance plan at work or you purchased health insurance directly from an indemnification company outside of the exchange, you don’t need this form to complete your tax filing.
You must file Form 8962 if:
- You fancy to claim the premium tax credit, or
- Advanced premium tax credits were paid for you or a family member covered by your chart
If you enrolled for health insurance through the Marketplace and received a Form 1095-A, you will use it to complete Form 8962. This manifestation, called a Health Insurance Marketplace Statement, has information about your coverage, including:
- Premiums paid
- Importance tax credits used
- Who is covered under your plan
Form 1095-A is issued to you by the Marketplace, not the IRS. If you don’t get one in the mail, you should be masterly to view your form by logging into your Marketplace account online.
It’s may receive more than one Shape 1095-A for the year if you changed Marketplace health insurance plans, added or removed family members from your coverage, or keep more than five family members enrolled on the same plan.
If you received a Form 1095-B from your indemnification company or a Form 1095-C from your employer, you don’t file Form 8962.
What Is Form 8962: Premium Tax Faith Used for?
Advanced premium credits are paid to your health insurance plan and reduce your monthly hard to come by payments. Form 8962 is used along with Form 1095-A to reconcile the difference between the amount of progressed premium tax credit you received and the amount of premium tax credit you’re eligible to receive, which is based on your income for the year.
This result matters because it determines whether or not you owe money to the IRS. If the amount of advanced premium tax credit received is less than the amount of the prize tax credit you’re eligible to receive, then you’re owed the difference. On the other hand, if the amount of advanced premium tax credit suffered exceeds the amount of the premium tax credit you’re eligible to claim, you owe money back to the IRS. The sum you owe could either reduce the size of your total tax refund or mean that you have to pay money to the IRS.
How to Fill Out and Read Form 8962: Premium Tax Credit
Form 8962 is a two-page be composed of broken into five parts.
Part I is where you record annual and monthly contribution amounts using your ones own flesh size, modified adjusted gross income, and household income.
Part II is where you reconcile your advanced reward tax credit received with monthly premium amounts.
Part III is used to calculate any excess advanced premium tax honesty payments, based on the information you provided in Part II.
Part IV allows you to allocate policy amounts, while Part V is habituated to for alternative calculation of your year of marriage.
Again, you need Form 1095-A to complete each section of the fashion, as well as your Form 1040 showing your modified adjusted gross income.
If the information on your Pose 1095-A is wrong, you need to have it corrected before completing Form 8962. You can request an updated form by contacting the Constitution Insurance Marketplace.
Where to Get Form 8962: Premium Tax Credit
Form 8962 can be found on the IRS website and is free to download. If you’re row taxes using an electronic tax filing software, this form should be generated for you as you navigate through the program’s questionnaire organization.
Can Form 8962 Be E-Filed?
E-filing can be convenient and take less time than completing paper tax forms. If you’re e-filing your charges, you should be able to complete Form 8962 through the tax filing software program you’re using.
Where to Mail Raise 8962
If you’re filling out a paper tax return and mailing your forms to the IRS, you include Form 8962 with your Form 1040. You then mail your fabrics to the IRS regional office that covers your state of residence. The IRS offers a helpful table that breaks down where to send your Produce 1040 and any accompanying forms, such as Form 8962, on its website.