If your client receives a letter from the IRS requesting information to reconcile Advance Payments of the Premium Tax Credit (Letter 12C), from the IRS:
- the Health Insurance Marketplace notified the IRS that advance payments of the premium tax credit were made on behalf of the taxpayer or their family to their health insurance company to reduce premium costs during the year, and
- Form 8962, Premium Tax Credit was not included in the taxpayer's return to reconcile the advance payments that were paid.
When the Health Insurance Marketplace pays advance payments of the premium tax credit on the taxpayer's behalf, Form 8962 must be filed with their return to reconcile the advance payments to the actual amount of the Premium Tax Credit the taxpayer is eligible for based on their actual household income and family size.
Additional information on how to respond to your client's IRS Letter 12C is available on the IRS website: Understanding Your Letter 12C