WASHINGTON, D.C. — The Internal Revenue Service (IRS) is sounding an alarm for taxpayers: If you received advance payments of the premium tax credit (APTC) and fail to reconcile it on Form 8962, your electronically filed tax return will be rejected.
Form 8962, or the Premium Tax Credit (PTC) form, is a critical component of tax filings for those who have benefited from APTC payments. These payments are made to the insurance company of any family member enrolled in Marketplace health insurance, as per IRS records.
The purpose of Form 8962 is to reconcile — or match up — the APTC payments with the PTC the taxpayer is entitled to. This reconciliation process is mandatory, even if the APTC completely covers the cost of the Marketplace insurance and the taxpayer hasn’t paid any premiums.
The IRS has observed a rising trend of taxpayers neglecting to include the required Form 8962 when using tax software to file their returns. This omission results in the electronic tax return being rejected, causing delays and potential penalties for taxpayers.
Understanding the role of Form 8962 can seem complex, but in essence, it’s about ensuring that the right amount of credit has been applied. If too much credit was given through the APTC, the taxpayer may owe additional tax. Conversely, if too little was given, the taxpayer could receive a credit on their return.
The increasing prevalence of missing Form 8962 submissions indicates a need for greater awareness and understanding among taxpayers. It’s crucial for anyone who has received APTC to ensure they correctly complete and include Form 8962 when filing their tax return.
For taxpayers who find their electronically filed return rejected due to a missing Form 8962, there is a process to correct and re-submit the return. The IRS provides guidance on how to navigate this situation, ensuring taxpayers can rectify their filings and stay in compliance. For more information on how to correct an electronically filed return that is rejected for a missing Form 8962, taxpayers can review How to correct an electronically filed return rejected for a missing Form 8962.
The IRS’s reminder highlights the importance of accurate and complete tax filings. With the implementation of the Affordable Care Act, taxpayers must understand how APTC affects their tax return and take the necessary steps to ensure they are filing correctly.
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