IRS Form 8962 is the one-page form you attach to your federal return to settle up the premium tax credit that helped pay for a Marketplace health plan. If advance payments went to your insurer during the year, the form compares those payments to the credit your final income actually earned you. The difference either boosts your refund or gets added to what you owe. You also use it to claim the credit at tax time if you paid full premiums yourself.
Who Has to File It
Two situations trigger the form. Advance premium tax credit payments were made for anyone in your household during the year, or you want to claim the credit for the first time on your return. Same form either way.
Leaving it off when advance payments were made is the most common mistake and it stops your refund cold. The IRS holds the return and mails a Letter 12C asking for the missing form. You get 20 days from the letter’s date to respond, and the agency estimates another six to eight weeks after that to release any refund.
What to Gather Before You Start
Form 1095-A
The Marketplace sends this by January 31 of the year after your coverage. It carries the three numbers you’ll copy straight onto Form 8962: your monthly enrollment premium, the premium for the second lowest cost silver plan (SLCSP) in your area, and the monthly advance payments sent to your insurer.
Check it for gaps. A missing month, a blank SLCSP figure, or advance payment amounts that don’t match your records all warrant a call to the Marketplace for a corrected 1095-A. If your SLCSP entry is blank or wrong and the filing deadline is close, HealthCare.gov has a tax tool at healthcare.gov/tax-tool that gives you the correct figure to use.
Modified Adjusted Gross Income
You’ll need your household’s MAGI: your adjusted gross income plus any tax-exempt interest, excluded foreign earned income, and income excluded under section 933 for Puerto Rico residents. If a dependent or other member of your tax family has to file their own return, add their MAGI to yours.
Family Size
Count yourself, your spouse if you’re filing jointly, and everyone you claim as a dependent. That number, together with the federal poverty guideline for a household your size, sets your income as a percentage of FPL, which drives everything else on the form.
Working Through the Form
Part I: Your Expected Contribution
Part I builds the expected household contribution toward premiums. Enter your MAGI, family size, and the poverty line for that family size. The form calculates your household income as a percentage of FPL on line 5. It then applies the statutory applicable percentage from 26 U.S.C. ยง 36B to produce your annual expected contribution. The IRS divides that by 12 for the monthly figure used in Part II. The exact percentages come from the year’s Form 8962 instructions, since they adjust for inflation.
Parts II and III: The Monthly Math
Part II is where the 1095-A numbers land. For each month of coverage you enter three figures: your enrollment premium, the SLCSP premium, and the advance payment already sent to your insurer.
If your plan, premiums, and household stayed constant all year, a single annual calculation on line 12 handles the whole year. If anything shifted mid-year, such as a plan change, a new family member, or an SLCSP change, use the monthly lines 13 through 23 instead.
The rule for each line is the same. Your credit for that month is the smaller of two amounts: your actual enrollment premium, or the SLCSP premium minus your monthly expected contribution. The form totals the monthly credits into your annual premium tax credit on line 24.
Line 25 totals the advance payments. The comparison between lines 24 and 25 tells you the outcome. Line 24 larger means a net credit coming to you. Line 25 larger means the advance payments overshot and you owe the difference back.
Part IV: Shared Policy Allocations
Fill in Part IV when a single Marketplace policy covered people who ended up on different tax returns. Divorced parents sharing a plan for the kids is the usual case, as is a policy that included a non-dependent. The enrollment premiums, SLCSP premiums, and advance payments have to be split between the returns.
You and the other taxpayer can agree on any percentage. Without an agreement, the default for former spouses is 50/50. Otherwise, the default is the share of enrollees on that policy who belong to your tax family. Both taxpayers file their own Form 8962, and the IRS confirms the allocations don’t add up to more than 100%.
Part V: Alternative Calculation for the Year of Marriage
Part V is optional and can cut the excess APTC repayment for couples who married during the tax year. Before the wedding, each spouse’s advance payments were based on individual income; after, the combined household income can push you into a higher bracket. This calculation partially softens that jump.
To use it, all of these must be true:
- Both spouses were unmarried on January 1.
- You married during the tax year.
- You’re filing a joint return.
- Someone in the tax family was enrolled in a Marketplace plan before your first full month of marriage.
- Advance payments were made during the year.
The worksheets you need live in IRS Publication 974, not in the Form 8962 instructions. Work through those first if you’re filing by hand.
Excess Advance Payments and the 2026 Change
For tax year 2025, repayment of excess advance payments is capped at income-based limits if your household income falls below 400% FPL. The caps range from $375 to $3,250 depending on income tier and filing status.
For tax year 2026, those caps are gone. If your advance payments exceed the credit you actually qualify for, you repay the full difference regardless of income. Reporting income accurately to the Marketplace during the year, and updating it when it changes, is the way to avoid a large bill at filing time.
Where the Totals Go on Your 1040
The final numbers from Form 8962 move onto your Form 1040, 1040-SR, or 1040-NR through the schedules. A net premium tax credit from line 26 goes to Schedule 3, line 9, which lifts your refund or trims your balance due. Excess advance payments you owe back go to Schedule 2, line 2, which adds to your tax.
Tax software handles this automatically once you enter the 1095-A. If you’re filing on paper, attach Form 8962 directly behind your return and schedules. The IRS cross-references your form against Marketplace records, so any mismatch with the 1095-A figures on file triggers a review.
Eligibility Points Worth Confirming
The premium tax credit is for people enrolled in a qualified Marketplace plan who don’t have access to other qualifying coverage, such as an affordable employer plan or a program like Medicaid. Under the permanent statute, household income has to fall between 100% and 400% of FPL for your family size.
For tax year 2025, the enhanced credits from the Inflation Reduction Act still apply: no 400% ceiling and lower contribution percentages at every tier. That expansion ended on January 1, 2026, and the FY2025 reconciliation law (P.L. 119-21) did not extend it. Starting with tax year 2026, the 400% cap returns. In the 48 contiguous states, that puts the cutoff at $63,840 for a single person and $132,000 for a family of four, based on the 2026 poverty guidelines. Alaska and Hawaii use higher thresholds.
Married taxpayers generally must file jointly to claim the credit. Two exceptions: filing as head of household, which typically requires living apart from your spouse for the last six months of the year and maintaining a home for a dependent; and filing as married filing separately as a victim of domestic abuse or spousal abandonment, which is available for three consecutive tax years.
If You Filed Without It
The IRS matches every 1095-A to a return. When advance payments show in their records and no Form 8962 came in with your return, they send Letter 12C. This is a processing hold, not an audit, and your refund sits until you respond.
Send the completed Form 8962 to the address on the notice within 20 days. Don’t file an amended return (Form 1040-X); the IRS specifically tells taxpayers not to do that here. After the agency receives and processes the form, refunds typically release in six to eight weeks.
Skipping reconciliation also affects next year’s coverage. The Marketplace can deny advance payments for the following year if it has no record of a Form 8962 for the prior year, which means paying full premiums each month and waiting until tax time to recover any credit you’re owed.