What Is Form 1095-A and Why Is It Needed for Taxes?
Learn how Form 1095-A connects your Marketplace health insurance to your tax return, ensuring you accurately account for your premium tax credit.
Form 1095-A, the Health Insurance Marketplace Statement, is a tax document for individuals enrolled in a health plan through the Marketplace. Issued by the Marketplace and not the IRS, it provides details about your health plan, premiums paid, and any financial assistance received. The form’s purpose is to supply the information needed to complete your federal income tax return accurately. You should receive Form 1095-A by mail or in your online account by mid-February, and you must wait for it before filing your taxes.
Decoding Your Form 1095-A
Your Form 1095-A is divided into three parts. Part I provides the basic identifying information for the policyholder and the issuer. Part II lists each individual covered by the health plan, referred to as the “coverage household,” confirming who was enrolled during the tax year.
Part III presents a monthly breakdown of your financial information in three columns that are central to your tax filing. Column A shows the total monthly premium for your health plan before any financial assistance is applied. Column B displays the premium for the second-lowest cost Silver Plan (SLCSP) available to you.
The SLCSP is a benchmark plan used by the Marketplace to calculate your premium tax credit. This figure is required to determine the financial aid you were eligible for, even if you did not enroll in a Silver plan. Column C details the advance payment of the premium tax credit (APTC) that was paid directly to your insurance company each month. The APTC is a subsidy designed to lower your monthly health insurance payments based on your estimated income.
Information and Forms Needed for Tax Filing
To use the information from your Form 1095-A, you must complete and file Form 8962, Premium Tax Credit (PTC). This IRS form, which can be downloaded from the IRS website, is used to reconcile the amount of APTC you received with the actual premium tax credit you qualify for based on your final income for the year.
The monthly figures from Part III of your Form 1095-A are transferred directly to Part 2 of Form 8962. You will enter the amounts from Column A, Column B, and Column C into the corresponding lines for each month you had coverage. Ensuring these numbers are copied accurately is important, as discrepancies can lead to processing delays.
How to Reconcile and File Your Taxes
Once you have completed the calculations on Form 8962, you will arrive at one of two outcomes. The first possibility is a net premium tax credit, which occurs when the premium tax credit you are eligible for is greater than the advance payments you received. This can happen if your income was lower than you estimated, and this net credit is carried over to Schedule 3 (Form 1040) to increase your tax refund or lower the tax you owe.
The second outcome is an excess advance premium tax credit repayment. This happens if the advance payments made on your behalf were more than the tax credit you ultimately qualify for, often because your final income was higher than estimated. In this case, you may have to repay all or a portion of the excess amount, which is reported on Schedule 2 (Form 1040) and increases your total tax liability.
After determining the outcome, you must attach the completed Form 8962 to your Form 1040 tax return. Filing your return without the required Form 8962 will cause the IRS to reject it, leading to significant delays.
Correcting Errors on Your Form 1095-A
If you discover incorrect information on your Form 1095-A, you must contact the Health Insurance Marketplace that sent you the form, not the IRS. The Marketplace is responsible for the information on the form and is the only entity that can make corrections and issue a new one. You should wait to receive the corrected form before you file your taxes to ensure the information you submit to the IRS is accurate.
If you have already filed your tax return using an incorrect Form 1095-A, you will need to file an amended return. Once you receive the corrected 1095-A, you must complete a new Form 8962 with the updated figures. You will then file Form 1040-X, Amended U.S. Individual Income Tax Return, attaching the new Form 8962 and any other schedules that may have changed.