Form 8962, Premium Tax Credit (PTC)

The PTC is a tax credit provided to eligible individuals and families who obtained health insurance coverage through the Health Insurance Marketplace.

Here are some important points about Form 8962 and the Premium Tax Credit:

  1. The Premium Tax Credit is calculated based on your income, household size, and the cost of premiums for a benchmark health insurance plan in your area. The credit will limit the amount you pay for premiums to a certain percentage of your income.

  2. When you file your return with us, you’ll need information from Form 1095-A, which is sent to you by the Marketplace. Form 1095-A provides details about your health insurance coverage, including the premiums you paid and any advance premium tax credits you received.

    Health insurance premiums are the amounts you pay, often monthly, for your health insurance coverage. An advance premium tax credit (APTC), on the other hand, is a type of subsidy provided by the federal government to help eligible individuals or families with low to moderate income afford health insurance premiums. This tax credit is applied in advance, directly to your monthly premiums, which lowers the amount you have to pay out-of-pocket for your health insurance. This will allow us to properly report your credit when you file.

This credit is used to reconcile the credits you received throughout the year with the actual credit you’re eligible for at tax time. If the advance payments were too high or your income was higher than estimated, you may need to repay a portion of the credit. On the other hand, if your income was lower than expected, you may be eligible for a larger credit. Be sure to enter your healthcare information under the "Credits and deductions" section in the filing flow so we can determine your eligibility for the PTC.