What Documents Do I Need to File Taxes?
From Tax Guide.
Tax Guide · Arab, Alabama
Form 1095-A, Form 8962 and the Premium Tax Credit
Got Form 1095-A from the Health Insurance Marketplace? You need it to complete Form 8962 and reconcile the premium tax credit on your tax return.
The short answer
What is Form 1095-A and why did I get one?
Form 1095-A is a statement from the Health Insurance Marketplace that lists the coverage you had through it and any premium help paid on your behalf during the year.
If you bought health insurance through the Marketplace (sometimes called Obamacare or the exchange), the Marketplace sends Form 1095-A, usually early in the year. It shows who was covered, for which months, the monthly premium, and the amount of advance premium tax credit paid to your insurer, if any.
This form is not sent to you by your insurance company, and it is not the same as the other health coverage forms you may see. It only comes from the Marketplace. You do not attach it to the return, but you need the numbers on it to complete your tax return correctly.
Do not ignore it. If you or anyone on your return had Marketplace coverage, the tax return generally cannot be finished correctly without it. Add it to your list of tax documents to bring to your preparer.
The credit
What is the premium tax credit?
The premium tax credit is a federal credit that helps some people with the cost of Marketplace insurance, based on household income and family size.
You may choose to have the credit paid straight to your insurer during the year to lower your monthly bill. That is called the advance premium tax credit. Or you may pay full price and claim the credit when you file. Either way, the credit is settled on your tax return.
The amount you qualify for is based on your income for the whole year, not just the income you estimated when you signed up. Because of that, the advance amount can end up higher or lower than the credit you were actually entitled to. Whether a person is eligible at all depends on their income, coverage, and other facts, so we do not say anyone qualifies without reviewing the details.
- Household income for the year and household size.
- Whether you or family members could get other qualifying coverage.
- Your tax filing status (see our guide on filing status).
- Who is on your return as a dependent.
Reconciling
What is Form 8962 and do I have to file it?
Form 8962 is the IRS form that compares the premium tax credit you received in advance to the credit you are entitled to based on your actual income for the year.
If advance payments were made for you, Form 8962 is required so the IRS can reconcile them. That is true even when you would not otherwise need to file a return. If you paid full price for Marketplace coverage and want to claim the credit, you also use Form 8962.
Depending on how the numbers work out, the credit on your return may be larger than the advance you received, which can increase a refund or reduce what you owe. It may also be smaller, which may reduce a refund or add to what you owe. The size of any repayment is governed by rules the IRS sets each year, so we confirm the current ones.
Leaving Form 8962 off when it is needed can cause problems. A return may be delayed, and future help with Marketplace premiums may be affected. If your return is held up, read why a refund can be delayed.
When it goes wrong
What if my Form 1095-A is wrong or missing?
If Form 1095-A is missing or shows the wrong information, contact the Marketplace first, because only the Marketplace can issue a corrected form.
Common problems include a wrong coverage month, a family member listed who was not covered, a person left off, or a premium amount that does not match what you paid. Look at each month on the form and compare it to your records.
If you already filed with wrong information, you may need to amend. Our article on amending a tax return explains how that works in general. Keep every corrected form and any messages from the Marketplace.
Never give your Social Security number or Marketplace log-in details to anyone who contacts you unexpectedly, and do not send them through our website. Bring your papers to the office or call us.
- Missing form: sign in to your Marketplace account, or call the Marketplace, and request it.
- Wrong numbers: ask the Marketplace for a corrected Form 1095-A.
- Life changes during the year: marriage, divorce, a new baby or a move should have been reported to the Marketplace when they happened.
Common situations
How do life changes affect my premium tax credit?
Changes in income, household size or marital status during the year can change the credit you are entitled to, even if your monthly premium did not change.
A raise, a second job, a spouse starting work or a change in who lives in your home can all shift your income for the year. If you did not report the change to the Marketplace when it happened, the advance payments may not match your final credit.
Marriage and divorce matter too. Married couples generally must file jointly to claim the credit, with limited exceptions, and people who divorce or separate may need to allocate policy amounts. These situations vary, so we look at the details together.
Dependents also matter, since the household on your return is used to figure the credit. Read about filing status before you decide how to file.
How we can help
How Melton Tax Services can help
Our office prepares income tax returns for individuals and families, including returns that include Form 1095-A and Form 8962.
Bring your Form 1095-A with the rest of your papers, and we will go over the numbers with you and prepare your return. Learn more about our income tax preparation service, or contact us.
You can also call 256-586-4635. We serve Arab and the surrounding area.
Answers
Questions about form 1095-a and 8962
Do I have to attach Form 1095-A to my tax return?
Generally no, you keep it with your records. The information on it is used to complete Form 8962, which is part of the return.
Do I have to file a return if I only received advance premium tax credit payments?
If advance payments were made for you, Form 8962 is generally required to reconcile them, so a return is needed even if your income is low. We confirm the current rules for your situation.
Is the 1095-A the same as the health coverage forms from my employer?
No. Form 1095-A comes only from the Marketplace. Other forms, such as those from employers or insurance companies, are different and are not used for the premium tax credit.
What if I got too much premium help during the year?
Then part of the advance may have to be repaid when you file. The rules on how much are set by the IRS each year, so we check the current ones rather than guess.
What if I never used the Marketplace?
Then you would not receive Form 1095-A, and this credit does not apply. Insurance through an employer or another source works differently.
Does Alabama have its own version of this credit?
Alabama has its own return and its own rules. The premium tax credit is a federal item, and we check how it flows to the Alabama return.
Read next
Related reading
Why Is My Tax Refund Delayed?
From Tax Guide.
How to Amend a Tax Return (Form 1040-X)
From Tax Guide.
Filing Status Explained: Which One Applies?
From Tax Guide.
Income Tax Services
A service Melton Tax Services provides.
Melton Tax Services
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