If an individual tax return should include Form 8962, Premium Tax Credit but does not, it will reject with code F8962-070:
The e-File database indicates that Form 8962 or a binary attachment with description containing "ACA Explanation" must be present in the return.
The IRS began using this reject in tax year 2021. Prior to 2021, if the tax return was missing Form 8962 the IRS sent the taxpayer a letter requesting they complete and submit the form by itself. Beginning with tax year 2021, a return that ought to include Form 8962 simply rejects.
To resolve the reject, the taxpayer needs to do one of two things:
- Give the preparer the Form 1095-A(s) they received from the Health Insurance Marketplace so that the preparer can complete Form 8962.
- Add a statement to their tax return explaining why they don't need to file Form 8962.
If the taxpayer is uncertain whether or not they were covered by Marketplace insurance, or if they cannot locate Form 1095-A, they should log in to their account at healthcare.gov and retrieve a copy of the form there.
Important notes about this reject:
- A return gets this reject because the IRS has information that the taxpayer, spouse, or a dependent has Marketplace insurance and/or received advance premium tax credit for marketplace insurance.
- This reject was added in 2021 so returns can be corrected and avoid being kicked into errors, which would cause significant delays in funding the refund.
- This was the IRS’s top reject in 2021 across the country, across all software vendors.
- To correct this reject, include either (a) a properly completed Form 8962 or (b) a statement disputing the need for Form 8962.
Resolving the reject
If the taxpayer had marketplace coverage and provides you with their Form(s) 1095-A, enter their information on Form 8962. See here for more information about entering Form 1095-A in a tax return.
Otherwise, if the taxpayer determines that they want to submit a statement disputing the need for Form 8962, follow these steps within the tax return:
- In the Personal Information menu answer YES to the question "Health Insurance through the Marketplace/Exchange?". (While this statement isn't strictly true, answering Yes is the way to access the Form 8962 menu.)
- Next, go to Payments, Estimates & EIC > Premium Tax Credit->PTC (8962) > ACA Explanation for Not Filing Form 8962. The two most common explanations are available to be selected to prefill the statement, either that the taxpayer simply had no insurance, marketplace or otherwise, or the taxpayer had insurance through their employer so had no need for marketplace insurance. A third option allows the taxpayer to include their own ACA Explanation. Select the desired explanation.
Note: A return that includes the ACA explanation will not include Form 8962.
For additional information and to get help locating the documents needed to file a complete, correct tax return, visit healthcare.gov.
Note: This article provides information about an IRS reject and how to correct it. It is not intended as tax advice.