IRS 8962 Explained

What is IRS 8962?

IRS Form 8962 is the form used to calculate and claim the Premium Tax Credit (PTC). This credit assists individuals and families in bridging the gap between their income and the cost of health insurance obtained through the Health Insurance Marketplace. Eligible taxpayers submit this form to help reduce their premium payments and maximize the affordability of their health insurance coverage.

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Purpose of IRS 8962

The primary purpose of IRS Form 8962 is to enable qualifying individuals to receive financial assistance for their health insurance premiums. This form collects necessary information regarding your household income, the number of people in your household, and the amount of premium tax credit you are eligible for. The IRS examines this information to determine your eligibility for the Premium Tax Credit and ensure that any subsidies received do not exceed IRS regulations.

Where is IRS 8962 used and by whom?

IRS Form 8962 is predominantly used by individuals and families who have acquired health insurance through the Health Insurance Marketplace and wish to claim the Premium Tax Credit. Common user groups include:

1.

Individuals or families with a low to moderate income looking for affordable health coverage.
2.

Self-employed individuals who purchased health insurance on their own.
3.

Individuals who have changed jobs or experienced a significant financial shift affecting their insurance needs.

For example, a single parent who purchased health insurance through the Marketplace and earns a qualifying income can use IRS 8962 to decrease their annual premium costs significantly.

Step-by-step: how to fill out IRS 8962

Filling out IRS Form 8962 requires meticulous attention to detail. Here is a step-by-step guide to assist you in completing the form:

1.

Header Information: Fill in your name, Social Security Number (SSN), and the tax year for which you are filing.
2.

Part I: Premium Tax Credit (PTC): Enter your household size and the modified adjusted gross income (MAGI). This section will determine your eligibility and the amount of credit.
3.

Part II: Calculating Your Premium Tax Credit: Enter the information from Form 1095-A (Health Insurance Marketplace Statement), including the amounts for the premiums you paid, the second lowest cost plan (SLCSP), and any advance payments of the premium tax credit.
4.

Part III: Repayment of Excess Premium Tax Credit: If you received too much advance PTC, report that information here. This may require a repayment when you file your taxes.

Utilizing pdfFiller can greatly simplify this process, allowing you to edit, eSign, and collaborate seamlessly while completing IRS 8962.

Who is required to complete IRS 8962?

The requirement to complete IRS 8962 depends largely on whether you enrolled for health insurance through the Marketplace and received advance payments of the Premium Tax Credit. Individuals and families who:

1.

Had a Marketplace insurance plan during the tax year.
2.

Received any advance payments of the Premium Tax Credit.
3.

Are reporting a change in circumstances that affect their coverage or eligibility.

All these groups are required to file this form to accurately assess their tax obligations and potential credits.

Information you need to complete IRS 8962

To accurately fill out Form 8962, you will need the following information:

1.

Your annual Modified Adjusted Gross Income (MAGI).
2.

Household size, including the number of persons claimed on your tax return.
3.

Details from Form 1095-A, which outlines your Marketplace coverage.
4.

Any advanced payments of the Premium Tax Credit received.
5.

The cost of the second lowest cost silver plan (SLCSP) in your area.

Having this information ready will streamline the process of completing your tax return.

How to submit IRS 8962

Once you have completed IRS Form 8962, you have several options for submission:

1.

Online Filing: Many tax software programs integrate IRS Form 8962, allowing easy online submission with your tax return.
2.

Mail: If filing paper returns, include Form 8962 with your other tax forms and mail them to the appropriate IRS address for your state.
3.

IRC Services: Utilize the IRS e-File system for easier handling and confirmation of receipt.

Be aware of deadlines for filing your tax returns to ensure timely processing.

When to update or refile IRS 8962

It is essential to update or refile IRS Form 8962 if there are changes in your circumstances, such as:

1.

A change in your household size or income affected by employment or familial changes.
2.

Receiving different amounts of advance payments of the Premium Tax Credit in the subsequent year.
3.

Any discrepancies found after initial filing that warrant corrections.

Keeping this form up to date helps avoid penalties or issues with the IRS.

What happens if you don’t file IRS 8962?

Failure to file IRS Form 8962, when required, can lead to various consequences:

1.

Potential disqualification from receiving the Premium Tax Credit in future years.
2.

Incurred penalties due to discrepancies in tax filings.
3.

Possible repayments of any excess credits received.

Understanding the implications of not completing this form correctly is vital to avoid additional financial strain.

Fill out IRS 8962 online

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Frequently Asked Questions About the IRS 8962

What is the IRS 8962 form and who needs to file it?

The IRS 8962 form, also known as the Premium Tax Credit, is essential for individuals who have received health insurance through the Health Insurance Marketplace. If you or your family members received these benefits, filing IRS 8962 is necessary to reconcile the premium tax credits you're eligible for. Failure to complete this form can result in delays or denial of tax credits, impacting your financial situation.

How do I determine if I need to complete the IRS 8962?

To determine if you need to complete the IRS 8962, check if you, your spouse, or any dependents had health coverage through the Marketplace during the tax year. If you received premium tax credits and are filing a federal tax return, IRS 8962 must be included to reconcile those benefits. Not filing it may lead to issues with the IRS and potential tax liabilities.

What information is required to fill out the IRS 8962 form?

Filling out the IRS 8962 form requires various pieces of information, including the annual premium tax credit you received, the total household income, and the number of individuals covered under your health plan. You'll also need to provide the calculated premium tax credit based on your eligibility and the Marketplace plan details. Ensuring accuracy with these data points will help you avoid inconsistencies when submitting your tax return.

What happens if I do not file the IRS 8962 form?

If you fail to file the IRS 8962 form despite being required to do so, the IRS may automatically adjust your tax return, leading to potential overpayment or underpayment of taxes. Additionally, without this form, you risk losing your premium tax credits, which could significantly raise your health insurance costs. It's vital to ensure that you file the IRS 8962 if you received Marketplace coverage.

How can I update my IRS 8962 if there are changes to my financial situation?

Should there be changes in your financial situation after filing your IRS 8962, you may need to amend your tax return by submitting IRS Form 1040-X. This allows you to update your income or family size, which could affect your premium tax credit. Timely updates are crucial, as they ensure that any discrepancies in your tax return are resolved, allowing you to maintain your eligibility for benefits.

Can I use tax software to file the IRS 8962 form?

Absolutely! Many popular tax software programs include features for completing the IRS 8962 form. These tools offer guided instructions to help you enter your information correctly, ensuring compliance with IRS requirements. Utilizing tax software can simplify the filing process and help you avoid common errors found when manually completing the IRS 8962.

Is there a deadline to file the IRS 8962 with my tax return?

Yes, the IRS 8962 form must be filed with your tax return by the typical tax deadline, which is usually April 15. If you need more time, you can file for an extension, but you will still be required to submit the IRS 8962 ahead of any determination of tax credits. It’s crucial to meet this deadline to avoid penalties and ensure your premium tax credits are accurately reconciled.

What should I do if I receive a notice from the IRS regarding my IRS 8962 form?

If you receive a notice from the IRS concerning your IRS 8962 form, it’s important to read the notice carefully to determine what actions are required. You may need to provide additional information or correct your form. Addressing any discrepancies promptly will prevent potential penalties and allow you to maintain access to your premium tax credits without disruption.

Are there resources available to help me understand the IRS 8962 form?

Yes, various resources can assist you in understanding the IRS 8962 form. The IRS website provides comprehensive guides and instructions for filling out the form, including eligibility criteria for premium tax credits. Additionally, consulting tax professionals or using reliable tax preparation software can further enhance your understanding and smooth the process of completing the IRS 8962.

How does the IRS 8962 impact my overall tax return?

The IRS 8962 form has significant implications for your overall tax return, particularly if you received health insurance through the Marketplace. By reconciling the premium tax credit through IRS 8962, you determine your actual eligibility, which can either adjust your tax due or result in a refund. Failing to complete this form could lead to unexpected tax liabilities or loss of credits, making it an essential part of filing your tax return.

Author:

by Iryna Marchuk

Lead Writer/Blogs Manager at airSlate

Disclaimer: This content is for informational purposes only. It is not legal or other professional advice. airSlate provides this material on an "as-is" basis and disclaims all representations, guarantees, or warranties, whether express, implied, or statutory, including but not limited to warranties of merchantability, fitness for a particular purpose, or accuracy.