Form 8962 is a form you must file with your federal income tax return for a year if you received an advanced premium tax credit through the Marketplace during that year. At Open Enrollment, when you apply for a premium tax credit for the coming year, your advanced tax credit amount is based on your estimated income for the coming year. At year-end, when you file your tax return, you will know what your actual income was for that year. If you underestimated your income at Open Enrollment, you might have received too much premium tax credit during the year, in which case you might have to repay some or all of the excess amount. If you overestimated your income at Open Enrollment, you might be owed additional tax credit, which you can take as a tax refund when you file. You must use Form 8962 to reconcile your estimated and actual income for the year. Even if you estimated your income perfectly, you must complete form 8962 and submit it with your federal tax return.
In general, it is very important to file your federal tax return with Form 8962 for any year you received an advanced premium tax credit. If you don’t file Form 8962, the IRS will call this a failure to reconcile, and you could be prevented from applying for Marketplace premium tax credits in the future.