Form 8962

Form 8962

Form 8962, officially known as the "Premium Tax Credit (PTC)," is a tax form used by individuals to calculate and claim the premium tax credit on their federal income tax return. This credit helps eligible low to moderate-income individuals and families afford health insurance coverage purchased through the Health Insurance Marketplace.

The form requires information about the taxpayer’s household income, family size, and the amount of premium tax credit received during the tax year. If a taxpayer received advance premium tax credits (APTC) to lower their monthly health insurance premiums, Form 8962 must be filed to reconcile these amounts with the actual credit they are eligible for based on their final income.

For example, if a taxpayer estimated their income too high and received excess APTC, they may have to pay back some or all of the excess credit when filing their taxes. Conversely, if they underestimated their income, they could receive an additional credit.

In summary, Form 8962 is essential for ensuring the correct amount of premium tax credit is applied, helping taxpayers manage their healthcare costs effectively.