Form 8962 - Premium Tax Credit
After the end of the year, anyone who bought health insurance in a Health Insurance Marketplace will receive Form 1095-A, Health Insurance Marketplace Statement from the Marketplace should they be included on a tax return. To calculate the PTC and reconcile the amount a taxpayer should receive with the Advance Premium Tax Credit, the statement must be recorded on Form 8962, Premium Tax Credit (PTC).
During the creation of an individual tax return Taxx Savage Pro prompts one to answer the question whether the taxpayer, their spouse or dependent purchased health insurance through a marketplace. The Menu of Form 1040 also has this question and can be accessed by:
- Selecting Personal Information
- Then Health Insurance through the Marketplace/Exchange?
An affirmative (YES) response avails Form 8962 for editing. The form is accessed by selecting:
- Payments, Estimates & EIC
- Premium Tax Credit (PTC)
Annual and Monthly Contribution Amounts (has two lines that may require alterations based on the present circumstances in tax return)
- Household Income-information here is generated from the return and may sometimes require modifications.
- Tax Family Size-where a spouse or a dependent may be credited on another tax return, Taxx Savage Pro automatically reduces the tax family size. Information in this section is editable where necessary.
- Dependents Adjusted Gross Income
Dependents Tax-Exempt Interests
Dependents Form 2555 Amounts
Dependents Non Taxable SSA Benefits (Provide information for dependents qualified to file income tax and needed to do so and not for those who are filing help them claim for refund of estimated or withheld tax).
- Poverty Table to Use- Federal Poverty Line tables are available in 48 neighboring states in Alaska, D.C. and Hawaii. Depending on the address provided. Taxx Savage Pro will automatically choose the relevant poverty table. However, for special circumstances such as transfer of the taxpayer or where the couple filing MFJ reside in separate states, it would help to choose the relevant table having greater dollar amount for same family size.
Needed to repay Excess APTC Received in totality- other scenarios require a NO response since they do not require the payment of all excess APTC and thus Taxx Savage Pro calculates the limitation. However, certain situations may require the change of the response to YES where the individual was ineligible for Marketplace insurance thus ineligible to claim APTC or PTC. A taxpayer may become ineligible when:
- They are not legally available in the U.S
- They are incarcerated
- They file as married couples filing separately and non-victims of spousal abandonment or domestic abuse.
It is worth noting that for household members legally present in the country, an exception arises. For further information on this issue, see Form 8962.
Note: This is not tax advice. It is a guide on how to complete Form 8962 in the Taxx Savage Pro program.
Further Information: