2022 Form 8962: Instructions for the Premium Tax Credit

Form 8962, Premium Tax Credit (PTC), is used to reconcile two figures for taxpayers with Health Insurance Marketplace coverage. The form compares the amount of advance premium tax credit (APTC) you received during the year with the actual premium tax credit you qualify for based on your final annual income. The APTC is the subsidy paid directly to your insurance company to lower your monthly premiums, while the PTC is the credit you are ultimately eligible to receive. The outcome of this reconciliation determines if you have an additional credit on your tax return or must repay some of the assistance you received.

Filing Requirements for Form 8962

The trigger for filing Form 8962 is receiving Form 1095-A, Health Insurance Marketplace Statement. If you, your spouse, or a dependent was enrolled in a Marketplace health plan, you will receive this form. You must file Form 8962 with your tax return, even if you do not normally file, because the advance payments you received were based on an estimated income and must be reconciled with your actual income.

Eligibility for the premium tax credit requires that your household income falls within a specific range and you are not eligible for other affordable health coverage. This includes employer-sponsored plans that meet minimum value and affordability standards or government programs like Medicare or Medicaid. You generally cannot use the “Married Filing Separately” filing status, though certain exceptions for victims of domestic abuse or spousal abandonment may apply.

A change extended through 2025 by the Inflation Reduction Act expanded PTC eligibility. Previously, households with income exceeding 400% of the federal poverty line (FPL) were ineligible for the credit. Under these expanded rules, taxpayers with income above 400% of the FPL may still qualify for the PTC.

Information and Documents Needed

The primary document you need is Form 1095-A, Health Insurance Marketplace Statement, which is sent by the Marketplace. You can access a digital copy through your online Marketplace account. Be sure to verify its accuracy before using it.

Part III of Form 1095-A contains three columns of monthly data. Column A shows the total monthly premium for your health plan. Column B lists the premium for the applicable second-lowest cost silver plan (SLCSP), the benchmark used to calculate your credit. Column C details the monthly APTC paid on your behalf.

You will also need your tax family size and Modified Adjusted Gross Income (MAGI). Your tax family includes yourself, your spouse if filing jointly, and any claimed dependents. To calculate MAGI for the PTC, start with the adjusted gross income (AGI) from your Form 1040 and add back any tax-exempt interest and certain excluded foreign earned income.

Calculating the Premium Tax Credit

The first part of Form 8962 calculates your annual and monthly contribution amount, which is what you are expected to pay for health insurance based on your income. Using your MAGI and family size, you will find an “applicable figure” in the form’s instructions. This percentage is multiplied by your MAGI to determine your expected annual premium contribution, which is then divided into a monthly amount.

In Part II, you use the monthly details from Form 1095-A. For each month of coverage, enter the premium from Column A and the SLCSP premium from Column B. Your allowable monthly credit is the lesser of the actual premium (Column A) or the benchmark premium (Column B), minus your monthly contribution from Part I. You will total these amounts to find your total allowed PTC for the year on Line 24.

This total is then compared to the total APTC you received during the year, which is the sum of Column C from your 1095-A and is entered on Line 25. If your total allowed PTC on Line 24 is greater than the APTC you received, the difference is your net premium tax credit. If the APTC you received is more than your allowed PTC, you have an excess advance payment that must be addressed in Part III.

Part III calculates the amount you must repay. Repayment limitations are based on your income relative to the FPL. For taxpayers with MAGI under 400% of the FPL, the repayment amount is capped, while those with income at or above 400% of the FPL are required to repay the entire excess amount.

Reporting the Outcome on Your Tax Return

Once you complete Form 8962, you transfer the results to your Form 1040. The outcome dictates where the information is reported and whether it increases your refund or the tax you owe.

If you have a net premium tax credit on Line 26 of Form 8962, report this amount on Schedule 3 (Form 1040), “Additional Credits and Payments.” This credit is refundable, meaning you can receive it even if you owe no income tax.

If you have an excess repayment amount on Line 29, this increases your tax liability and is reported on Schedule 2 (Form 1040), “Additional Taxes.” You must attach the completed Form 8962 to your Form 1040 or 1040-SR when you file.