The 8962 form is a document sent by the government that calculates your potential Premium Tax Credit. You can use this document to determine how much money you will receive and Who should take any applicable monthly penalty payments into account. This article explains the benefits of this program and what it is exactly.
What is the 8962 form?
The 8962 form is a tax form that you can use to claim the premium tax credit. Your health insurance premiums may be partially covered by the premium tax credit, a government subsidy.
The federal government provides tax credits for health insurance premiums. Health insurance providers get the 8962 form from you. Your health insurance company will then use the information on the 8962 form to calculate your eligibility for the premium tax credit.
The premium tax credit can help you reduce your taxes by up to $3,350 annually. You should claim the premium tax credit on your taxes if qualified.
Why do I need to complete Form 8962?
A government-funded program called the Premium Tax Credit helps those with modest incomes pay their health insurance costs. If you meet any situation below, you could be qualified for the Premium Tax Credit.
A resident alien or U.S. citizen If you're married and filing jointly with your spouse; if you have a kid under 26 who has been enrolled in school continuously; and if you do, your spouse.
Your dependent parent is 65 or older and has a fixed income of $85,000 or less per year. The 8962 form is an online form that you can use to determine your eligibility and claim your tax credit.
If you owe taxes, you will get a refund depending on how much of a tax credit you received.
Exactly where to file Form 8962
For those who buy health insurance via the Marketplace, there is a tax credit called the Premium Tax Credit.
PTC recipients must earn 50% or less of the federal poverty line. Single filers must make less than $24,000 annually. Your combined income as a married couple filing jointly must be less than $36,000 annually.
Utilizing the web portal may determine whether you are eligible for the PTC. The portal will ask you for basic health insurance coverage information. After you submit your information, the portal will provide you with a preliminary estimate of your eligibility for the PTC.
You must submit the form with your tax return to qualify for the PTC. You may send in or submit the form online.
What are my tax options if I don't need to file an 8962 form?
If you are not required to file an 8962 form, you may still be eligible for a premium tax credit. People earning less than a specified adjusted gross income (AGI) are eligible for this credit.
The premium tax credit is based on health insurance costs. You can receive up to $6,550 per individual and $13,000 per family in 2018.
Form 8962 must be filed with federal taxes to get the credit. This form is used to confirm that you are eligible for the credit. To claim the EITC, you may also utilize this form (EITC).
If you are not required to file an 8962 form, it is important to speak with a tax professional to determine your eligibility for the premium tax credit.
What is Premium tax credit, and who can get it?
The premium tax credit is a government incentive that helps to offset the cost of buying a new car. It is available to people who are taxpayers and who buy or lease a new car that costs more than $75,000.
The automobile must be bought or leased in the U.S. You may get the credit even if you don't pay taxes on the automobile money.
The premium tax credit is based on how much your car costs, not how much you pay. You can receive a larger credit if you buy a more expensive car. Maximum $7,500 per car credit.
Only new automobiles qualify for the premium tax credit. Used or CPO autos are exempt (CPO).
Alternatives to premium tax credit
There are some alternatives to the premium tax credit, each with its benefits and drawbacks. The EITC is the most prevalent alternative (EITC). The EITC is a tax credit awarded to low-income individuals and families. It helps offset taxes depending on income and family size.
EITC benefits:
- It's for everyone.
- It is refundable, meaning you can receive a refund even if you do not pay taxes.
- The EITC targets low-income individuals and families, making it more beneficial than other tax credits.
Pros and Cons of 8962 form filling
There are two types of premiums that you can receive with the 8962 form: the affordable coverage plan and the qualified health plan. An affordable coverage plan is an option that you can use if you have only one child who is covered by health insurance.
A qualified health plan is an option that you can use if you have more than one child who is covered by health insurance.
The tax credit might total $7,000 per individual. The 8962 form's yearly limit is $14,000. The credit requires Form 8962. Using Form 1040EZ, you can't utilize Form 8962.
Conclusion
The premium tax credit is a federal tax credit that helps low- and moderate-income people buy health insurance. The form explains the process for claiming the premium tax credit and provides information on who is eligible for the credit, how much money they can claim, and what documents are required to make a claim. So if you're interested in taking advantage of this valuable financial assistance, check out the form before filling out your taxes.
