If any individual on the tax return (taxpayer, spouse or dependent) was covered by a Health Insurance Marketplace plan, they will receive a Form 1095-A, Health Insurance Marketplace Statement. Form 1095-A comes directly from the federal marketplace or a state exchange and is required to be issued to the policyholder by January 31. The taxpayer will receive the form in the mail but they can also download a copy from their account at healthcare.gov.
The information on Form 1095-A is reported on Form 8962, Premium Tax Credit, and the form reconciles the amount of premium tax credit the taxpayer received during the tax year with the amount they were eligible to receive. Since the IRS knows who has marketplace insurance, the return for a taxpayer that had marketplace insurance will reject if e-filed without Form 8962.
Form 1095-A includes the following information needed to complete the Form 8962:
- Each individual covered under the policy.
- The enrollment premiums for each month, found in Part III, column A.
- The applicable Second Lowest Cost Silver Plan (SLCSP) that applies to the covered individual(s). It’s not necessarily the plan which the individual(s) enrolled in but it is used to determine Net Premium Credit. The SLCSP amounts are found in Part III, column B.
- The Advance Premium Tax Credit (APTC) the policyholder received during the year as an offset against their monthly premium. The APTC amounts are found in Part III, column C.
If the taxpayer was covered under marketplace health insurance, their return must include Form 8962. Don't file their return before you obtain a copy of their Form 1095-A.
Shared Policy Allocation
If the policy is shared between individuals on two or more tax returns, Form 8962 Part IV, Shared Policy Allocation needs to be completed in each return to indicate to the IRS the percentages of columns A, B, and C each taxpayer is being allocated. Shared Policy Allocation is not supported in ProWeb at this time.
Note that if a dependent is included on a policy, they are filing their own tax return, and they are indicating on their return that they are a dependent of someone else, shared policy allocation isn't required as their tax return won't include Form 8962. In this scenario, the individual who is claiming them as a dependent will file Form 8962.
Special rules for spouses not filing MFJ
There are special rules for spouses included on the same Form 1095-A but who are not filing jointly. If you are preparing a tax return for a married individual not filing jointly with their spouse, see the Form 8962 instructions for a discussion of this situation and how it changes preparing Form 8962.
Entering Form 1095-A
To enter Form 1095-A into Form 8962 in TaxSlayer ProWeb, from the Federal Section of the tax return, (Form 1040) select:
- Health Insurance - Click Yes to the health insurance question, then Continue.
Verify Your Household Members - This page lists the members of the household as indicated on the tax return, i.e., the taxpayer, spouse, and dependents and is for informational purposes only since the penalty for not having health insurance has been eliminated since tax year 2019. There is no reason to add an individual to the list since it only relates to the penalty calculation, not the premium tax credit calculation.
However, note this line:
If you wish to override the calculated Tax Family Size please click here
The tax family size affects the federal poverty line for the household, which in turn affects the "Applicable figure" used to determine the taxpayer's annual and monthly contribution amounts, which in turn affects how much premium tax credit is allowed. For the purposes of the premium tax credit, the calculated tax family size is equal to the number of people on the tax return (taxpayer plus spouse plus dependents) minus anyone indicated as being a dependent on someone else's return. This number should not be adjusted if the taxpayer is taking premium tax credit. Only in rare situations does it need adjustment, and if it is adjusted the return will have to be filed in paper form as it will reject if electronically filed. Read the Form 8962 instructions for the unusual scenarios when you may need to adjust this number.
- 2021-only question: Were you eligible to receive unemployment compensation for any week in 2021? - Answer Yes if the taxpayer, and/or their spouse if filing jointly, received or were eligible to receive unemployment compensation during 2021. Answering Yes will set line 5 "Household income as a percentage of federal poverty line" to 133%.
Are you required to repay all of the APTC received? - Generally this question is answered No. It is answered Yes when
(a) the taxpayer isn't lawfully present in the US, or
(b) meets the criteria to receive the Health Coverage Tax Credit.
- Do all Forms 1095-A include coverage for January through December, with no changes in monthly amounts? - If Yes, you only need to enter the annual totals shown on Form 1095-A line 33 for columns A, B, and C. If No, you will need to enter the amounts in each of those columns for each month of the year.
Entering multiple Forms 1095-A
If tax return requires multiple Forms 1095-A:
- Column A: for each month, add the amounts in Column A and enter the total as the Premium Amount;
- Column B: If the SLCSP is the same amount for each month on all the Forms 1095-A, enter that amount for each month - don't add the amounts together. Otherwise, if the policies were purchased in separate states (evidenced by Column B being a different number), see the Instructions for Form 8962 column (b) as the correct amount to enter depends on whether or not more than one state is involved, whether any allocating is being done, and whether the taxpayer's eligibility for PTC varied month to month.
- Column C: for each month, add the amounts in Column C and enter the total as the Advance Payment of PTC.
Note: This is a brief guide on entering Form 1095-A into TaxSlayer ProWeb. This is not intended as tax advice.
IRS: Instructions for Form 1095-A
IRS: Instructions for Form 8962