Find out how to fill out Premium Tax Credit Form 8962, the form for reporting ObamaCare Tax Credits. We’ll review MAGI, FPL, and Adjusting credits. The information on the 8962 Premium Tax Credit form below is updated for 2016 plans and 2017 tax filing.
NOTE: Below are forms for 2016 needed for 2017 tax filing. New forms are posted up every year, and the links will generally update automatically. Still, always make sure to check the dates on the forms you are filing to avoid filing old forms.
Premium Tax Credit Form 8962 and Instructions
Here are the forms and official IRS instructions. See below for our simplified breakdown of form 8962.
8962 IRS forms for 2016 (used for 2017 filing):
Other IRS forms related to the PTC forms can be found here.
Who Needs to Fill out the ObamaCare Tax Credit Form?
You only need to fill out the form 8962 if:
You or a dependent had health insurance coverage in a qualified health plan purchased through a Health Insurance Marketplace (also known as an Exchange). This includes a qualified health plan purchased on healthcare.gov or through a state Marketplace.
What You Need to Know about Form 8962
Form 8962, Premium Tax Credit (PTC) is the form you will need to report your household Modified AGI (MAGI), your Federal Poverty Level amount, your family’s health insurance premium, exemptions, and the cost assistance you received.
Below we do a walkthrough of filling out the PTC form, and we simplify the terms found within.
Reporting your Premium Tax Credits on your 1040
Complete Form 8962 and attach it to your 1040. You’ll Adjust Tax Credits from Form 8962 on line 46 and report your Net Premium Tax Credit amount from Form 8962 on line 69 of your 1040.
Second Lowest Cost Silver Plan
To calculate your subsidy amount correctly, you’ll need to know the cost of the second-lowest-cost sliver plan in your state’s marketplace. You can find that info your 1095a form. If you didn’t get a 1095, or if you got the wrong one, you should wait until you get the right one and follow up with the Marketplace. If, however, you need to fill out the form on your own, you can use the Second Lowest Cost Silver Plan tax tool from HealthCare.Gov to help.
PTC Form 8962 and Instructions
TIP: This guide was written using the 2014 forms. While figures and page numbers have been updated for the 2017 tax filing season (where you’ll file the 2016 forms), the fact that some page numbers and figures change each year means you are going to want the official documents in front of you. Use this guide for additional insight and helpful advice, not as the final authority on filing your taxes. That is generally good advice for ALL online tax information that isn’t from officially from the IRS.
Please open up Form 8962, Premium Tax Credit (PTC) and IRS Instructions for form 8962 and your 1040 form (since your Tax Credit is based on the results of your 1040). This will make following along easier and more helpful. You will also need forms 1095-A, 1095-B, or 1095-C, which show minimum essential coverage. These should have been sent by your insurer.
Part 1: Annual and Monthly Contribution Amount
Line 1. Family Size. The number of people you claim as dependent and yourself.
Line 2. Modified AGI (MAGI). This is your Gross Income (GI) Adjusted (A) and then Modified (M). Your 1040 will walk you through calculating AGI. Modified AGI (MAGI) includes Adjusted Gross Income on your federal income tax return plus any excluded foreign income, nontaxable Social Security benefits (including tier 1 railroad retirement benefits), Supplemental Security Income (SSI), and tax-exempt interest received or accrued during the taxable year.
Learn how to calculate MAGI (this link contains the MAGI worksheet from the 8962 instructions used to calculate MAGI).
See Pages 2 and 6 of the instructions for more information.
Line 3. Total Household Income. You and your dependents’ MAGI combined.
Line 4. Federal Poverty Level. The Federal Poverty Level (FPL) guidelines let you compare your income to 100% of the FPL. Poverty level changes every year and is determined by family size. You can find your Federal Poverty Level amount by finding 100% of the FPL for your family size.
See Pages 2 and 6 of the instructions for more information.
Line 5. Household Income as a Percentage of the Federal Poverty Level. To find household income as a percentage of the Federal Poverty Line, divide MAGI by your family size’s Federal Poverty Level amount.
Household income will turn out to be a percentage of the baseline Federal Poverty Level based on your MAGI. For those receiving Tax Credits, this should be between 100%-400%. Learn more about Federal Poverty Guidelines.
Line 6. The Results. If you didn’t qualify for Premium Tax Credits (PTC) due to income and family size (the number is greater than 400% FPL) and you received advance payment of PTC, see page 14 of the Form 8962, Premium Tax Credit (PTC) Instructions for more information on reporting your Excess Advance PTC Repayment amount. You can also see our guide to Advanced Premium Tax Credit repayment limits.
If the result was less than 100%, you could keep your tax credit so long as you meet the requirements. If the result is over 400%, you must repay the full amount. See table below for Advanced Tax Credit Repayment limits.
TIP: These figures are updated for plans held during 2016. They are subject to slight changes each year. See page 14 of the 8962 instructions.
|Income % of FPL||Filing Status:
|Less than 200% FPL||$300||$600|
|At least 200% FPL
but less than 300%
|At least 300% FPL
but less than 400%
|If your year-end income exceeds 400% FPL, you will have to return the total amount of Advanced Premium Tax Credits you received.|
Line 7. Applicable Figure. See the chart found on page 14 of the PTC instructions below to fill out line 7 on the PTC.
TIP: These figures are updated for plans held during 2016. The figures below are subject to change each year, the image below is meant to offer a visual example. See page 8 of the current 8962 instructions to confirm the figures each year.
Line 8a. Your annual contribution to healthcare. Your household income capped by the applicable amount from line 7. (Somewhere between 2.03% and 9.66% of your Modified household income. Written in the applicable figure table as a number between .0203 – .0966). TIP: Make sure to use current numbers as they are subject to change each year.
Line 8b. Your monthly contribution. Your annual contribution divided by 12.
Part 2: Premium Tax Credit Claim and Reconciliation of Advance Payment of Premium Tax Credit
Tax Credit Amounts and Premium Amounts. To fill out a lot of the form, you’ll need forms 1095-A, 1095-B, or 1095-C, which show minimum essential coverage. These are sent by your insurer or employer. Not all insurers and employers are required to send forms, but if you got marketplace cost assistance, you should get this form. You’ll use this to calculate premium amounts and Tax Credit amounts. Open this form as well.
Line 9. Did you Meet Certain Requirements that would affect your calculation? If you share a policy, got married, or want to use an alternative calculation due to a life circumstance, you won’t use the standard calculation methods and will instead follow the instructions on page 8.
Line 10. Did you maintain minimum essential coverage? If you maintained coverage for each month of the year, then you’ll answer yes. If you are using multiple forms or had coverage gaps, you answer no. You can find this information on your 1095 forms. Many people will have short coverage gaps. Up to three months in a row is exempt.
Line 11-23. Calculating APTC Owed Amounts. You’ll fill out the chart of Premium amounts and assistance per month as seen below. All of this information can be found on form 1095 or will require calculations. See page 9 of the instructions for details.
Line 24. Total Premium Tax Credit. E is what your allowed Premium Tax Credit was. The total from E column of line 11 or combined totals of all E columns of lines 12 – 23.
Line 25. Total Advanced Payment of Premium Tax Credit. F is the amount you got in advance. The total from F column of line 11 or combined totals of all F columns of lines 12 -23.
Line 26. Net Tax Credit. The difference between the total Advanced Payment and Total Premium Tax Credit. You then report this on your 1040 (Line 69 of a standard 1040). If you got married and that messed up your tax credit, you enter 0 meaning you won’t have to pay back your tax credit amounts. See page 11 for details.
Part 3: Repayment of Excess Advance Payment of the Premium Tax Credit
The next section of the PTC form deals with repayment of excess Advanced Premium Tax Credits.
Line 27. Excess Advance Payment of PTC. If line 25 is greater than line 24, subtract line 24 from line 25.
Line 28. Repayment Limitation. The amount is limited. This ensures you won’t owe more than you can afford.
- Less than 200% FPL ………………………….. $300 single, $600 any other filing status
- At least 200% FPL but less than 300% … $750 single, $1,500 any other filing status
- At least 300% FPL but less than 400% … $1,275 single, $2,500 any other filing status
See our guide to Advanced Premium Tax Credit repayment limits for further clarification.
29. Excess Advance Premium Tax Credit Repayment. Enter the smaller of line 27 and line 28 both here and on Form 1040, line 46. You are simply paying the lesser of amounts owed for excess tax credits. This is then reflected on your 1040.
Part 4: Shared Policy Allocation
Line 30-34. Multiple payers for one plan. If you are allocating different tax credit amounts on the same plan to different people (in instances of marriage or divorce, for example), you report that in this section.
Instructions found on page 11.
Part 5: Alternative Calculation for Year of Marriage
Complete Part 5 to elect the alternative calculation for your pre-marriage months. Electing the alternative calculation is optional, but doing so may reduce the amount of excess APTC that you must repay. To qualify, you must meet guidelines found on page 15 of the instructions.
File your Premium Tax Credit Form
Once you complete the form, make sure to file it, and don’t forget to report your both your Excess Advance Premium Tax Credit Repayment (on line 46) and your Net Tax Credit (on line 69 of your 1040).
Instructions for Form 8962, Premium Tax Credit (PTC)
ObamaCare Taxes: Premium Tax Credit Form 8962