Contributed by: TriciaD, FreeTaxUSA Agent
What is Form 8962 and why you might need it?
Form 8962 is used to claim the premium tax credit (PTC), which is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace.
Form 8962 must be filed with your tax return if you want to claim the PTC. It’s also required if you receive advance payments from the Marketplace. This form calculates the PTC based on your income and family size. It reconciles the advance credit you received with the amount you're eligible to receive.
If you participated in the Health Insurance Marketplace, you would typically receive a Form 1095-A by January 31st of the following year. Information from Form 1095-A is used to prepare Form 8962.
What caused the rejection of my tax return due to Form 8962?
If the IRS requires you to attach Form 8962, and you fail to do so, your e-filed return could be rejected. Below is a typical rejection notice you might get:
If your e-filed tax return is rejected, or if you're notified by the IRS through a letter that Form 8962 wasn’t included with your tax return, this indicates that the IRS is aware you received advance payments of the Premium Tax Credit, and they weren’t included in your tax return.
This could happen if:
- You didn’t receive Form 1095-A from the Marketplace, or
- You received Form 1095-A but didn’t use it to fill out Form 8962.
- You made a mistake on Form 8962 or didn’t attach it to your tax return.
This is what the rejection notice will say:
What if Form 1095-A is incorrect?
If the information on Form 1095-A is incorrect, or if you think you shouldn’t have received a Form 1095-A because you weren’t enrolled in Marketplace health insurance, contact the Federally-facilitated Marketplace Call Center.
If you purchased insurance through a State-based Marketplace, please contact your Marketplace Call Center, which information you can find on your State-based Marketplace website.
How to resubmit a tax return to include Form 8962 after it's been rejected?
If the IRS rejected your tax return due to missing Form 8962, you'll need to incorporate this form and resubmit your return. Here's how you can proceed:
- If you set up a Healthcare.gov account, get a copy of form 1095-A online from your account. For State-based Marketplace coverage, check your Marketplace’s website for instructions on how to get the form.
- If you have multiple Forms 1095-A, input details from each one.
- In your FreeTaxUSA account, using the information from Form 1095-A complete the Marketplace Health Insurance screens. Follow this menu path: Deductions/Credits > Health Insurance > Marketplace Health Insurance (Form 1095-A).
- The software provides an option "+Add a 1095-A" for inputting information from an additional Form 1095-A.
What steps do I take if Form 8962 isn’t part of the tax return I'm resubmitting?
You will be given this option before resubmitting your return:
- Confirm the premium tax credit wasn’t paid to the Marketplace health insurance company for any member of your family.
- If you didn’t have Marketplace Health Insurance or find yourself unable to attach Form 8962 to your tax return, furnish a written explanation (referred to as "ACA Explanation") detailing the reasons it isn’t included.
- If mailing the return, attach the IRS rejection notice if you have it.
- Include a copy of documents showing your attempts to obtain a corrected or completed Form 1095-A from the Marketplace, including emails, phone records, or confirmation numbers.
- If your tax return filed through FreeTaxUSA was rejected, it’s possible to enter an “ACA Explanation Statement” in your account.
- To enter your explanation, follow this menu path: Deductions/Credits > ACA Explanation Statement. Confirm with Yes when asked “Are you sure you don’t need Form 8962 included with your tax return?”. Provide an explanation.
Wait for the IRS to process your tax return. If you’re due a refund, it will be issued to you. If you owe money to the IRS, you will need to pay by the due date to avoid penalties and interest.
Keep in mind if you file your taxes without reconciling advance payments, you might owe money, experience refund delays, and impact future advanced credit payments.
Also See:
Self-employed health insurance when you have a 1095-A - FreeTaxUSA Community
