Why it matters
A taxpayer who received advance premium tax credits must reconcile them on the return. If the advance credit was too high, the taxpayer may owe part of it back; if it was too low, the taxpayer may get an additional credit.
Example
A client received advance premium tax credits during the year. The preparer uses Form 1095-A and Form 8962 to compare the advance credit with the allowed credit and reports the difference.
Related terms
Questions about Form 8962
Who must file Form 8962?
A taxpayer who received advance premium tax credits, or who wants to claim the premium tax credit, generally files Form 8962 with the individual return. The form uses the information from Form 1095-A.
What happens if the advance credit was too high?
The taxpayer may have to repay some or all of the excess advance credit, subject to a repayment limit based on income. The preparer calculates the amount on Form 8962.