Healthcare

Every year, some taxpayers receive an e-file rejection because the IRS is expecting Form 1095-A, the Health Insurance Marketplace Statement, even though they never enrolled in a Marketplace plan. This usually happens because someone else listed the taxpayer on a Marketplace application, because a prior-year enrollment was never closed out, or because of a data mismatch at the IRS. The rejection does not mean you owe a penalty or that you did anything wrong. The IRS-sanctioned path for e-filing without a 1095-A is to resubmit with a binary PDF attachment explaining why Form 8962 is not required, not to enter fake zeros on a form you were never issued. This article explains how to identify the root cause, how to file correctly despite the rejection, how to respond to IRS correspondence including Letter 12C, and how to prevent the same problem next year.

If you received advance premium tax credit (APTC) payments to help cover your Marketplace health insurance premiums, those payments are reconciled on your federal tax return using Form 8962. When your actual household income for the year turns out to be higher than you estimated when you enrolled, the IRS requires you to repay some or all of the excess credit. The repayment amount depends on your final income relative to the federal poverty level and whether a repayment cap applies to your situation. Understanding why this happened and what options you have going forward can help you avoid a larger surprise next filing season.

When someone who received advance Premium Tax Credit (APTC) gets married during the year, their PTC eligibility is retested for the entire year using married-filing-jointly (MFJ) status, combined household income, and year-end household size. If joint income is too high, some or all of the APTC must be repaid on Form 8962. A special one-time relief called the Alternative Calculation for Year of Marriage can reduce repayment by recalculating the pre-marriage months separately, but its benefit is often limited because the IRS requires income to be split 50/50 between spouses for that calculation regardless of who actually earned it.