This article will help you with frequently asked questions about the Premium Tax Credit, including how to resolve diagnostic ref. 42135, how to complete Form 8962 when your client can claim the self-employed health insurance deduction, and how to generate less common sections of the form.
For more information, refer to the IRS Questions and Answers on the Premium Tax Credit.
Does the 8962 still apply for tax years after 2018?
Yes. Under the Tax Cuts and Jobs Act, the individual shared responsibility payment was reduced to $0 for months beginning after December 31, 2018. Beginning in tax year 2019, Form 1040 no longer has a "Full-year health care coverage or exempt" box, and Form 8965 for Health Coverage Exemptions is no longer in use. Due to these changes, Forms 1095-B and 1095-C are no longer required to be entered into the tax return and should be kept by the taxpayer for their records.
However, if your client received Form 1095-A Health Insurance Marketplace Statement, you'll need to enter that information in their tax return. The 1095-A is used to generate Form 8962 to reconcile any advance payments of the premium tax credit or claim the premium tax credit. Click here for more information.
Why is the tax year 2021 Form 8962, line 5 showing 133%?
If your client (or their spouse, if married filing jointly) received unemployment compensation for any week of 2021, their household income for purposes of this form is capped at 133%. See the Form 8962 instructions for more information.