What Is Form 8962? ACA Premium Tax Credit Reconciliation

Form 8962 is the IRS form you attach to your tax return to figure your ACA premium tax credit and reconcile it against any advance payments the Marketplace already sent to your health insurer during the year. The math on the form produces one of two results: either your actual credit is larger than the advance payments and the difference boosts your refund, or the advance payments were larger than the credit you qualify for and you owe the difference as extra tax.

Who Has to File Form 8962

You need to file Form 8962 if any of the following is true for the tax year:

Advance payments of the premium tax credit were made to your insurer for anyone in your tax household. This holds even if you would not otherwise be required to file a return.
You enrolled in Marketplace coverage, took no advance payments, and want to claim the full credit on your return.
Advance payments were made for someone you told the Marketplace would be on your return, but that person ended up on no one’s return.

If nobody in your household enrolled in a Marketplace plan and no advance payments were made for anyone you cover, the form does not apply to you.¹

The credit itself is only available for coverage bought through a government Marketplace or exchange. Insurance purchased directly from a private insurer does not qualify, and you generally cannot claim the credit if you had access to affordable employer coverage or a program like Medicare or Medicaid.² Married taxpayers generally must file jointly to qualify, with a narrow exception for victims of domestic abuse or spousal abandonment, and you cannot be a dependent on someone else’s return.

What You Need Before You Start

Form 1095-A

You cannot complete Form 8962 without Form 1095-A, the Health Insurance Marketplace Statement. The Marketplace sends it by early February. For each month you were enrolled, it lists your actual enrollment premium, the premium for the second-lowest-cost silver plan available to your household, and the advance credit payments made on your behalf. The IRS specifically advises waiting to file until the 1095-A is in hand.³

Check the numbers before you use them. If the enrollment premium or the silver plan figure looks wrong, contact the Marketplace and ask for a corrected form. Column B is a frequent trouble spot: if you enrolled without requesting any advance payments, the second-lowest-cost silver plan premium may be missing or inaccurate, and you will need to determine the correct figure yourself using the IRS health coverage tax tool or Publication 974.

Modified Adjusted Gross Income

The premium tax credit uses a slightly broader income figure than the AGI on your Form 1040. Your modified AGI for this purpose is your AGI plus three items that are otherwise excluded: tax-exempt interest, foreign earned income, and the nontaxable portion of Social Security benefits.¹ Forgetting the nontaxable Social Security add-back is one of the most common errors, particularly for people who retired before Medicare eligibility and bought Marketplace coverage in the meantime.

You then compare that household income to the federal poverty level for your family size. For 2026, the poverty level is $15,960 for a single person and $33,000 for a family of four in the contiguous states, so 400% of the poverty level lands around $63,840 and $132,000 respectively.⁴

How the Reconciliation Works

When you enrolled through the Marketplace, you estimated your income for the coming year, and the Marketplace used that estimate to send monthly advance credit payments to your insurer. Life rarely tracks the estimate. A raise, a lost job, a marriage, or a new child all shift the final number. Form 8962 is where that comparison happens, and federal regulations require every taxpayer who received advance payments to run it on their return.⁵

Two outcomes are possible. If your final credit is larger than the advance payments, the difference is a net premium tax credit that increases your refund or reduces what you owe. If the advance payments exceeded your final credit, the excess is added to your tax bill.⁶

Two 2026 Changes That Raise the Stakes

Two shifts make the 2026 tax year materially different from 2021 through 2025, and both increase the cost of getting your income estimate wrong.

First, the 400% federal poverty level cap is back. Temporary legislation removed that ceiling from 2021 through 2025 and let higher-income households qualify for reduced credits. That expansion expired at the end of 2025.⁷ For 2026 coverage, a household income even a dollar above 400% of the poverty level wipes out the credit entirely, and every advance payment must be repaid. There is no partial credit at that point.

Second, the repayment caps are gone. In prior years, taxpayers with income under 400% who received more advance credit than they were entitled to had their repayment limited by income bracket. For tax years after 2025, those caps no longer exist, and the full excess is owed regardless of income.⁸ Reporting income changes to the Marketplace during the year, rather than discovering them at tax time, matters more than it used to.

Walking Through the Form

Your Applicable Percentage

Once you know your household income as a percentage of the federal poverty level, the form has you look up an applicable percentage, which is the share of income you are expected to contribute toward premiums. For 2026, the percentages start at 2.10% for households below 133% of the poverty level and climb to 9.96% for households between 300% and 400%.⁹ These rates are higher than the enhanced 2021–2025 figures, which started at 0% at the low end, and the difference can produce sticker shock for filers who grew used to the lower contributions.

Monthly Calculation

For each month of coverage, the credit equals the lesser of two amounts: your actual enrollment premium for that month, or the second-lowest-cost silver plan premium minus your expected monthly contribution (your annual contribution divided by twelve). You then compare each month’s allowed credit to the advance payment shown on your 1095-A for that month. The form lets you use annual totals instead of monthly figures if your circumstances did not change during the year.¹ The final lines sum the months to produce either a net credit that flows to your refund or an excess advance payment that adds to your tax.

If You Married or Divorced During the Year

Marriage in the middle of the year can trigger a large repayment because two single-filer households merge into one joint household with combined income higher than either estimate. Form 8962 offers an optional alternative calculation for the year of marriage that can reduce the repayment. To use it, both spouses must have been unmarried on January 1, married during the tax year, filing jointly, with advance payments made for at least one spouse. Part IV of the form handles splitting policy amounts between spouses and Part V runs the alternative calculation. If both parts apply, complete Part IV first.¹⁰

Divorce requires a different allocation. If both former spouses were on the same Marketplace policy, they must agree on how to split the enrollment premiums, the silver plan premiums, and the advance payments between their separate returns. The IRS instructions include allocation tables for these situations.

What Happens If You Skip or Miss It

Attach the completed Form 8962 to your Form 1040, 1040-SR, or 1040-NR. Tax software handles the attachment automatically. On a paper return, place the form immediately behind your main return pages.¹

The IRS cross-checks your return against Marketplace records. If its system shows advance payments were made for you but your e-filed return does not include Form 8962, the return is rejected under business rule F8962-070. You will need to add the form and refile, or attach a written explanation of why the form is absent, for example if you believe the Marketplace records are wrong.¹¹ Paper filers who leave the form out will receive a Letter 12C asking for it, which typically adds weeks to any refund.¹²

Failing to reconcile has a longer tail as well. If you skip Form 8962 for a year in which advance payments were made, the Marketplace can make you ineligible for advance payments in future years, meaning you would owe the full monthly premium yourself and could only claim any credit at tax time.⁶ If you receive a corrected 1095-A after filing, you will likely need to amend the return to match the new figures.

1
Internal Revenue Service. Instructions for Form 8962 (2025)
2
Office of the Law Revision Counsel. 26 USC 36B – Refundable Credit for Coverage Under a Qualified Health Plan
3
Internal Revenue Service. Health Insurance Marketplace Statements
4
U.S. Department of Health and Human Services. 2026 Poverty Guidelines – 48 Contiguous States
5
eCFR. 26 CFR 1.36B-4 – Reconciling the Premium Tax Credit With Advance Credit Payments
6
Internal Revenue Service. Premium Tax Credit – Claiming the Credit and Reconciling Advance Credit Payments
7
Internal Revenue Service. Eligibility for the Premium Tax Credit
8
Internal Revenue Service. Updates to Questions and Answers About the Premium Tax Credit
9
Internal Revenue Service. Revenue Procedure 2025-25
10
Internal Revenue Service. 2025 Instructions for Form 8962 – Premium Tax Credit
11
Internal Revenue Service. How to Correct an Electronically Filed Return Rejected for a Missing Form 8962
12
Internal Revenue Service. Understanding Your Letter 12C