Form 8962: Premium Tax Credit (PTC) – 2013 Coverage Year Guide

What the Form Is For

Form 8962, Premium Tax Credit (PTC), is the form you use to claim and reconcile financial help for health insurance purchased through the Health Insurance Marketplace (the Exchange) under the Affordable Care Act.

If you or a family member enrolled in a qualified health plan through HealthCare.gov or a state Marketplace for 2013 coverage, this is the form that:

1. Lets you claim the credit if you qualify but didn’t get any help during the year, and
2. Reconciles advance payments (APTC) if the Marketplace sent money directly to your insurer during the year to reduce your premiums.

The Marketplace estimated your credit when you enrolled, based on your projected income and family size. Form 8962 compares that estimate to your actual income and family situation for the year and:

• Gives you an additional credit if you were underpaid, or
• Makes you repay excess APTC if you were overpaid.

Think of it as the year-end true-up between you, the Marketplace, and the IRS.

When You’d Use This Form (Late / Amended Returns)

For 2013 coverage, you normally filed Form 8962 with your 2014 federal tax return (due April 15, 2015). But you may still need it in late or amended situations.

You must file Form 8962 if:

• You (or someone in your tax family) were enrolled in a Marketplace plan, and
• Any Advance Payment of the Premium Tax Credit (APTC) was paid for that coverage, or
• You’re claiming the Premium Tax Credit for the first time on your tax return.

This is true even if your income is otherwise low enough that you normally wouldn’t have to file a return.

Late Filing

If you received APTC in 2013 but never filed a tax return, you’re required to file one (with Form 8962) as soon as possible. Until you do:

• The IRS can assess penalties and interest if you owe money.
• The Marketplace can limit or stop future APTC until you reconcile prior-year payments.

Amended Returns

You’ll typically need to file Form 1040X (amended return) with a corrected Form 8962 if:

• You receive a corrected Form 1095-A (for example, after the Marketplace fixes premium or SLCSP data).
• You discover you used the wrong household income, family size, or filing status.
• The policy covered someone who ended up on a different tax return than expected (for example, a child claimed by the other parent).

Whoever claims the person as a dependent is the one who must reconcile the PTC for that person—even if someone else paid the premiums or handled enrollment.

Key Rules for 2013

2013 was the first year Premium Tax Credits were available, and the rules were strict.

Income Requirements

To qualify, your household income generally had to be between 100% and 400% of the federal poverty line (FPL) for your family size.

For the 2013 coverage year, the continental U.S. FPL figures were:

• $11,490 – household of 1
• $15,510 – household of 2
• • $4,020 for each additional person

(Higher amounts applied for Alaska and Hawaii.)

If your income ended up over 400% of FPL, you:

• Don’t qualify for any PTC, and
• Must repay all APTC you received.

There are special rules for some lawfully present non-citizens with income below 100% of FPL who weren’t eligible for Medicaid; they may still qualify for the PTC.

Marriage Rules

• In general, if you’re married and want to claim the PTC, you must file Married Filing Jointly.
• Exceptions: victims of domestic abuse or spousal abandonment may file Married Filing Separately and still claim the credit if they meet special conditions and check the appropriate relief box on Form 8962.
• Couples who married during the year may use special alternative calculation rules to reduce how much excess APTC they must repay.

Minimum Essential Coverage

You cannot claim the PTC for any month you or a family member were:

• Enrolled in, or
• Eligible for certain other “minimum essential coverage” such as:
  • Affordable employer-sponsored coverage
  • Medicare
  • Medicaid
  • CHIP
  • TRICARE

In many cases, simply being eligible for employer coverage (even if you didn’t enroll) disqualifies you from the PTC for that month.

Premium Payment Requirement

To claim the credit for a month:

• Your share of the premium must have been paid by the due date of your tax return (excluding extensions).

If your coverage was cancelled for nonpayment, you:

• Can’t claim PTC for months you didn’t pay your share, but
• Still must reconcile any APTC paid for those months.

Form 1095-A Requirement

You must have Form 1095-A from the Marketplace to complete Form 8962. It lists, for each month:

• Your enrollment premium
• The Second Lowest Cost Silver Plan (SLCSP)
• The APTC paid on your behalf

Without Form 1095-A, you can’t accurately complete Form 8962.

Step-by-Step Process (High Level)

Form 8962 looks intimidating, but it follows a logical sequence.

Part I – Annual and Monthly Contribution Amount

1. Calculate household income
   Add together the modified AGI for:
   • You
   • Your spouse (if filing jointly)
   • Any dependents who must file a tax return
2. Compare to the FPL
   Use the FPL for your family size to find your income as a percentage of FPL.
3. Find your “applicable percentage”
   Use the table in the instructions. This is the percentage of income the law expects you to contribute toward the SLCSP premium.
4. Compute your monthly contribution
   Multiply your household income by your applicable percentage and divide by 12. That’s your monthly contribution amount.

Part II – Premium Tax Credit and Reconciliation

This is where you calculate your actual PTC and reconcile it with APTC.

For each month:

1. From Form 1095-A, enter:
   • Column (A): Enrollment premiums
   • Column (B): SLCSP premium
   • Column (C): APTC paid
2. Compute your maximum PTC:
   • Monthly PTC = lesser of:
     • Your enrollment premium, or
     • SLCSP premium
   • Then subtract your monthly contribution amount.
3. Total your annual PTC and compare it to total APTC paid.
   • If total PTC > APTC → you get an additional credit.
   • If APTC > total PTC → you owe excess APTC back.

Part III – Repayment Limitation

If you owe excess APTC, there may be a cap based on your income as a percentage of FPL. For example:

• Lower-income taxpayers have smaller caps.
• Single filers between 100%–200% FPL have a much lower repayment limit than those at 300%–400% FPL.
• Over 400% FPL: no cap—you must repay all excess APTC.

Parts IV & V – Shared Policies and Marriage During the Year

You’ll use these parts if:

• A policy covers people in different tax households (e.g., children on one plan but claimed by two different parents on separate returns), or
• You married during the year and need to split policy amounts between single and married periods.

These sections tell you how to allocate premiums, SLCSP amounts, and APTC between different taxpayers or different parts of the year.

Common Mistakes and How to Avoid Them

1. Not Filing at All When APTC Was Paid

If any APTC was paid for someone in your tax family, you must file a return with Form 8962—even if:

• Your income is below the usual filing threshold, or
• You don’t owe any regular income tax.

Failure to file can delay or cut off advance credits in future years.

2. Using Incorrect Form 1095-A Data

During the early years of the Marketplace, many corrected 1095-A forms were issued. Using old or incorrect data can:

• Inflate or understate your PTC
• Trigger IRS notices

Always make sure you’re using the latest, corrected Form 1095-A.

3. Miscalculating Household Income

Household income isn’t just the AGI you see on your return. It also includes:

• Tax-exempt interest
• Foreign earned income (even if excluded)
• The nontaxable portion of Social Security benefits for anyone counted in household income who must file a return

Leaving these out can make your income look lower than it really is, and may lead to:

• Taking more credit than you’re entitled to
• Larger repayments later

4. Claiming Credit for Ineligible Months

You can’t claim the PTC for months when:

• You (or a family member) were eligible for other minimum essential coverage, such as an affordable employer plan, Medicare, or Medicaid—even if you didn’t enroll.

Newborns and new enrollees have special rules:

• Babies enrolled at birth generally count for the entire birth month—not a prorated piece.

5. Married Filing Separately Without Relief

Generally, married taxpayers filing separately:

• Are not eligible for the PTC, and
• Must repay all APTC they received, regardless of income, unless:

They qualify for domestic abuse or spousal abandonment relief and check the appropriate box.

6. Misallocating Shared Policies

When one policy covers people who show up on different tax returns (for example, children split between divorced parents), premiums and APTC must be allocated correctly.

• Ignoring these rules leads to mismatches between your return and IRS/Marketplace records.
• Use the allocation rules in Parts IV and V to split amounts correctly.

What Happens After You File

If You’re Owed Additional Credit

If your actual PTC is greater than the APTC you received:

• The difference is a refundable credit on your tax return.
• It can increase your refund or reduce your balance due.

If You Owe Repayment

If APTC exceeds your allowable PTC:

• The excess appears on Form 1040 as Additional Tax, increasing your total tax or reducing your refund.
• You can pay:
  • Electronically,
  • By check, or
  • Via an installment agreement if you can’t pay in full.

Interest, and sometimes penalties, will accrue on unpaid balances.

IRS Matching and Notices

The IRS will:

• Match your Form 8962 against the 1095-A information it receives from the Marketplace.
• If something doesn’t match, you may receive a CP2000 or similar notice proposing changes.

You’ll usually have 30 days to respond with:

• A corrected Form 8962, or
• Documents supporting your calculations.

Impact on Future Marketplace Coverage

While large repayments don’t legally bar you from getting APTC in future years, they’re a warning sign:

• You may want to lower or turn off APTC and claim the credit at year-end instead to avoid big surprises.

Some states with their own Marketplaces also have state-level premium credits that must be reconciled separately on your state tax return.

FAQs

What is the Premium Tax Credit?
A refundable tax credit that helps eligible individuals and families afford health insurance purchased through the Health Insurance Marketplace by reducing monthly premiums.

What is Advance Payment of the Premium Tax Credit (APTC)?
APTC is the monthly subsidy paid directly to your insurance company to lower your premium, based on the Marketplace’s estimate of your yearly income and family size.

Who must file Form 8962?
You must file Form 8962 if:

• You received APTC for anyone in your tax family, or
• You’re claiming the PTC for Marketplace coverage—even if no advance was paid.

What is the Second Lowest Cost Silver Plan (SLCSP)?
The benchmark silver plan in your area for your coverage family. The PTC is calculated using its premium, not necessarily the plan you actually enrolled in.

Can I claim the credit if I bought insurance outside the Marketplace?
No. Only Marketplace plans qualify for the PTC. Off-exchange plans, employer plans, and other coverage do not.

What if my income changed during the year and I didn’t tell the Marketplace?
You still reconcile using your actual final income. If your income rose and you didn’t update it, you may have to repay some or all of the APTC you received (subject to repayment caps if your income stays under 400% FPL).

What if I never received Form 1095-A?
Contact your Marketplace (federal or state) immediately. They are required to issue it. You cannot properly complete Form 8962 without that information.

Sources:
All information derived from official IRS guidance, including:

• 2014 Instructions for Form 8962 (covering 2013 coverage)
• IRS Affordable Care Act Tax Provisions and related publications at IRS.gov

‍