How to File Taxes with Form 1095-A from the Marketplace
Filing taxes with a Form 1095-A requires reconciling your health insurance credit. See how this process determines your final tax refund or amount owed.
If you or a household member enrolled in a health plan through the Health Insurance Marketplace, you will receive Form 1095-A, Health Insurance Marketplace Statement. This document provides information for your federal tax return, detailing your monthly health insurance premiums and the amount of any advance premium tax credit payments made on your behalf. You should receive it by mail by mid-February, or you may access it online through your Marketplace account as early as mid-January.
Understanding Your Form 1095-A
Form 1095-A is divided into three parts. Part I, Recipient Information, identifies the person who enrolled in the policy, their mailing address, and the policy number. You should verify that this basic information is correct.
Part II, Covered Individuals, lists every person in your household covered by the Marketplace policy. This section includes names, social security numbers, and the months each person had coverage. Review this part to ensure all family members are listed correctly for the appropriate months.
Part III, Coverage Information, contains the financial data for your tax return, broken into three columns for each month. Column A shows the total monthly premium for your health plan, which is the full cost of the policy before any financial assistance is applied.
Column B lists the premium for the applicable Second Lowest Cost Silver Plan (SLCSP). The SLCSP is a health plan in your area used as a benchmark to determine your premium tax credit amount. This is not necessarily what you paid, but it is the figure the government uses to calculate the credit you are eligible for based on your location and family size.
Column C shows the Advance Payment of the Premium Tax Credit (APTC). This is the amount the Marketplace sent to your insurance company each month to lower your premium payments. When you applied for coverage, this amount was estimated based on your projected income, and you will later compare it to the actual credit you qualify for.
Information Needed to Reconcile Your Premium Tax Credit
The data from Form 1095-A is used to complete and file Form 8962, Premium Tax Credit (PTC). This IRS form is where you perform a reconciliation. Reconciliation is the process of comparing the advance credit payments you received during the year with the actual premium tax credit you are eligible for, which is based on your final household income.
To complete Form 8962, you will need your Form 1095-A and your Form 1040. The process involves transferring the figures from your 1095-A directly to Form 8962. The monthly premium amounts from Part III, Column A, are entered on Form 8962, while the SLCSP amounts from Column B and the APTC amounts from Column C are also entered in their corresponding places. The form then guides you through calculating your total annual premium tax credit and comparing it to the advance payments you received.
Filing Your Tax Return with Form 8962
Once you have filled out Form 8962, you must include it with your Form 1040 when you file your federal tax return. You do not need to attach Form 1095-A, but keep it with your tax records. Failing to file Form 8962 when required will cause the IRS to reject your return or delay your refund, and can also prevent you from receiving advance premium tax credits in future years.
The reconciliation on Form 8962 results in one of two outcomes. If you used less advance credit than you were eligible for, you will have a Net Premium Tax Credit. This amount is added to your tax refund or reduces the tax you owe and is reported on Schedule 3 (Form 1040).
Conversely, if you received more in advance payments than you qualified for, you will have an Excess Advance Premium Tax Credit Repayment. This can happen if your income was higher than you estimated. This repayment amount is added to your total tax liability on Schedule 2 (Form 1040), which will reduce your refund or increase the tax you owe.
Correcting an Inaccurate Form 1095-A
If you find errors on your Form 1095-A, it is important to have them corrected before you file your tax return. Common mistakes include incorrect coverage months, wrong premium amounts, incorrect SLCSP figures, or individuals listed who were not covered. Filing with an inaccurate form can lead to an incorrect tax calculation.
To fix an error, you must contact the Health Insurance Marketplace that issued the form, not the IRS. Explain the error and request a corrected Form 1095-A. The Marketplace will investigate and issue a new form if necessary.
If the tax filing deadline is approaching and you have not received a corrected Form 1095-A, you should wait for the new document. Filing an extension using Form 4868 can give you an additional six months to file, helping you avoid late-filing penalties while you wait for the correct information.