Form #8962 Premium Tax Credit
is used to reconcile the APTC Advance Premium Tax Credit – subsidy with your IRS # 1040.
If you got too high a subsidy or too low, it gets finalized at tax time. If your subsidies were too high you may have to pay penalties. See form 2210 Underpayment of tax and the instructions for more details.
but first you need the Proof of Coverage Form 1095 A from Covered CA
and B if applicable – like if you had Covered CA part of the year and other coverage the rest of the year, from an Insurance Company, Government – Like Medicare or Medi-Cal or your Employer.
IRS Instructions to file the RIGHT forms, if there are ANY issues or problems —- IRS — Affordable Care Act Tax Provisions
When you are done completing # 8962, enter the calculation on line 46 and/or 69 of 1040 form.
2018 Schedule 1 Additional Income & Adjustments to Income
If you didn’t file your 1040 or 8962 for 2017 – you’ll be getting a letter about that!
Explanation of differences in new 2018 tax forms
Do you think this process is complicated? See what my CPA thinks.
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Historical
Kaiser Permanente Reminder & FAQ’s to do 2014 Taxes
Will Donald’s Executive order of 1.20.2017 eliminate having to pay back any excess APTC? Blog Insure Me Kevin.com 1.23.2017
How to fill out the exemptions part?
2017 Report on how well the IRS did on Verifying PTC Premium Tax Credits for the 2016 Tax year
Summary from Insure Me Kevin.com
GAO Report to Congressional Committees 7.2017 81 pages * Summary – Modern Health Care
Molina Health Care reports that the IRS states that 57% of tax payers may lose the credits as they haven’t filed form 8962 or filed their taxes! Email dated 7.30.2015 IRS New York Times 8.4.2015
I didn’t make changes to my subsidy amounts, income, family filing status, dependents, etc. due to illness.
What is the criteria to get an exemption and fix the issues now?
ACCEPTED:
Fear of IRS.
Taxpayer who had been laid off was overwhelmed by Schedule C instructions. As a result he just shut down and stopped filing for several years as the fear and anxiety mounted. He hired a CPA (Weston) to get his books in order. Once all returns were filed and taxes assessed, the IRS abated all penalties, because they agreed that the taxpayer had no malicious intent.
Health issues.
Prolonged illness made it difficult to concentrate, and short-term memory suffered.
Mourning.
Grief due to death of a close family member.
Burglary.
House was robbed and family computer with all records was stolen
ONE FREE PASS:
But before taxpayers go groveling with excuses, they have another, guilt-free option: the first-time penalty abatement waiver. Apparently the IRS has a warm and fuzzy side, because it believes that everyone is entitled to one mistake. So if you’ve got a clean record — you’ve filed (or filed a valid extension for) all required returns and are all paid up — you can qualify for the FTA waiver.
USA Today
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Reasonable Cause
The key word here is “reasonable,” and it doesn’t include, “I forgot.” If you ask for a waiver for reasonable cause, you need to establish the facts for the issue you are having that keeps you from taking care of your taxes, and you need to produce documentation to back it up.
Fire, natural disaster, casualty, or other serious disturbances count as reasonable cause. Plenty of people in the U.S. have been hit with extreme weather, devastating forest fires, and other issues over the past year or so. If your home or business is in a riot zone, you may receive a waiver since having your structure blocked off by police tape is probably considered a pretty serious disturbance.
If you are unable to obtain your records, the IRS may grant a waiver.
Death, serious illness, incapacitation, or unavoidable absence of you, the taxpayer, or a member of your immediate family is considered reasonable cause. It’s pretty cool of the government to acknowledge that dead people would have a tough time taking care of their taxes.
Other reasons establishing you used all “ordinary business care and prudence” to meet your Federal tax obligations but just couldn’t do it. “I forgot” does not, unfortunately, count as reasonable care and prudence. Neither does lack of funds unless the reason for the lack meets reasonable cause criteria.
Top Tax Defenders.com
IRS Website on Penalty Relief due to Reasonable Cause
OK, that might work for the IRS, but do you have a more specific citation for Covered CA?
Enrollee’s Duty to report changes
I can’t come up with the money!!! What can I do?
If your MAGI is below 400% of the federal poverty level, there is a cap on the amount you must pay back, even if you received more in assistance than the amount of the cap. However, at higher income levels you’ll have to pay back the entire amount you received, which could be a lot. Our page on maximum pay back. 8962 Instructions – Payback limitations
you have until the due date of your return (April 15 plus extensions) to make a traditional IRA contribution and deduct the amount from your taxes. Likewise for contributions to a 401(k), SEP-IRA, SIMPLE Plan, or other tax qualified retirement plan for the self-employed. You also have until the due date of your return to make a contribution to a health savings account. Moreover, you have until the due date of your return to establish a traditional IRA or SEP-IRA account if you don’t already have it.
Nolo – what to do if you owe subsidy repayments?
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CA Couple must pay back $13k in Advance Subsidies
They said in their U.S. Tax Court filing that they had been told by Covered California marketplace representatives that they qualified for subsidy assisted insurance coverage.
If they had known that was not the case, the Walkers said they would not have purchased insurance they did.
The Tax Court took that into account, noting in the decision:
“We note that it appears that Covered California may have incorrectly informed petitioners that they were eligible for the APTC for 2014. We are not unsympathetic to petitioners’ plight; however, we are bound by the statute as written and the accompanying regulations when consistent therewith. … The simple facts are that petitioners’ MAGI exceeded eligible levels and that they must repay the APTC payments made on their behalf.”
Don’t mess with taxes.com
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https://insuremekevin.com/irs-underpayment-payment-penalty-triggered-with-obamacare-subsidy-repayment/
https://insuremekevin.com/13000-tax-bill-triggered-covered-california-income-advice/
https://insuremekevin.com/download/covered_california/1095_A/Polk_Covered_CA_decision.pdf
Do you have a citation that shows I can make an IRA contribution even if I file late – extension?
I’m glad you asked that question. One can’t trust everything on the Internet! Even if NOLO said it. Here’s what IRS Publication 590A says:
Contributions must be made by due date.
Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. For most people, this means that contributions for 2018 must be made by April 15, 2019 (April 17, 2019, if you live in Maine or Massachusetts).
One of the problems was that our child moved out, got a good job and filed his own taxes. Is there a way we can fix that on our tax return?
Looks like you can. Double check with your CPA or tax counsel. Check this out from Quicken – Intuit.
form 8962 for the agi, do I include va disability?
The IRS Website on VA Disability Benefits states that benefits do not count as income.
The definition of MAGI Income for Subsidies of taking line 37 of your 1040 and adding back in Social Security, Foreign Income and Tax Exempt Interest doesn’t mention VA benefits, so the answer would be no.