If anyone included on a tax return was covered under health insurance through the Health Insurance Marketplace, they will receive Form 1095-A, Health Insurance Marketplace Statement from the Marketplace after the end of the year. This information on this statement must be entered on Form 8962, Premium Tax Credit (PTC), to calculate the allowable Premium Tax Credit and reconcile the tax credit received in advance during the year (the "Advance Premium Tax Credit" or APTC) with the amount the taxpayer is eligible to receive.
When creating an individual tax return in TaxSlayer Pro, one of the initial questions concerns whether the taxpayer, the spouse, or any dependent was enrolled in health insurance through the marketplace. This question can also be found from the Main Menu of the tax return (Form 1040) here:
- Personal Information
- Health Insurance through the Marketplace/Exchange?
Answering YES will make Form 8962 available for editing.
To access Form 8962, from the Main Menu of the tax return (Form 1040) select:
- Payments, Estimates & EIC
- Premium Tax Credit (PTC)
Annual and Monthly Contribution Amounts - There are two lines that may need modification depending on the circumstances in the tax return. Most returns don't need to enter this menu though.
- Household Income - the information in this menu pulls from the return but may need modification in certain circumstances:
- Tax Family Size - TaxSlayer Pro will automatically reduce the tax family size if a dependent or spouse can be claimed on another return. If this number needs further editing, select this line and edit as needed.
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Dependents Adjusted Gross Income
Dependents Tax-Exempt Interest
Dependents Form 2555 Amounts
Dependents Nontaxable SSA Benefits - Include information for dependents who are required to file an income tax return because their income meets the income tax return filing threshold, however don't include information for dependents who are filing a tax return only to claim a refund of tax withheld or estimated tax. - Poverty Table to Use - There are three Federal Poverty Line tables: 48 contiguous states plus D.C., Alaska, and Hawaii. TaxSlayer Pro will choose the poverty table to use based on the address in Personal Information. However, if the taxpayer moved during the year, or if a couple filing MFJ lived in different states, choose the appropriate table that has the higher dollar amount for the same family size.
Allocating Policy Amounts with Another Taxpayer - If the taxpayer covered under a marketplace policy got married during the year, or if one or more individuals on the policy are the taxpayer, spouse, or dependent on another tax return, you will need to select this menu and choose one or both of the allocation options as needed. Each option opens up a new menu line to complete Form 8962 Part IV or Part V as needed.
Use Annual PTC Totals? - On Form 1095-A if all 12 months are identical across all three columns, you can select this line and answer Yes to the question regarding using annual PTC totals. This will save entry time as you will then only need to add the sum of each of the three columns, rather than all 12 months worth of data. Note that you cannot make this choice if you're allocating policy amounts with another taxpayer.
Enter Form 1095-A Amounts (Form 8962 Part 2) - Enter the three columns' amounts here, whether entering each month from January to December or entering the annual totals.
Required to Repay All of the Excess APTC Received - There are several uncommon situations in which excess APTC may not all need to be paid back, and TaxSlayer Pro will calculate the limitation in these situations. Thus, it is generally best to leave this question at the default answer NO, but there are several unusual situations where the answer should be changed to YES because the individual was not eligible for Marketplace insurance and, therefore, not eligible to claim PTC or APTC:
- The primary taxpayer is not lawfully present in the U.S.
- The primary taxpayer is incarcerated.
- The taxpayer files as married filing separately and is not a victim of domestic abuse or spousal abandonment.
Note that there is an exception to the above where the APTC was received for household members who were in the country legally. Consult the Form 8962 instructions for further information.
ACA Explanation for Not Filing Form 8962 - If you had previously e-filed a tax return for a taxpayer who did not have marketplace insurance but the IRS rejected the return due to Form 8962 needing to be included in it, you will select this menu to include an explanation with the return indicating the reject is in error and why the taxpayer did not have marketplace insurance. See here for more information about this reject and how it can be satisfied.
Note: This is a brief overview of Form 8962 in the TaxSlayer Pro program. It is not intended as tax advice. For further information, consult the IRS resources in Additional Information below.
Additional Information:
How is the Premium Tax Credit Calculated?
Desktop: Form 8962 - Shared Policy Allocation
Desktop: Shared Policy Allocation - Divorced or Legally Separated
Desktop: Alternative Calculation for Year of Marriage
Desktop: Form 1095-A - Health Insurance Marketplace Statement
IRS Tax Tip 2016-34 - How the Premium Tax Credit Can Help You