Understanding the Affordable Care Act (ACA) and Your Federal Tax Return
To help you better understand how the Affordable Care Act of 2010 (also known as ACA, the Health Care Law, or Obamacare) may affect your federal tax return, TaxAct has compiled key information regarding related forms and terminology. Not all items listed below will apply to every taxpayer—each situation is unique. For some individuals, none of these items may be relevant.
Key Definitions
Excess Advance Premium Tax Credit Repayment
- Where it's calculated: Line 29 of Form 8962 (Premium Tax Credit)
- Where it's reported: Line 2 of Schedule 2 (Form 1040)
(or Line 44 of Form 1040-NR for nonresident aliens) - What it means: This is the amount you must repay if the advance premium tax credit (reported on Form 1095-A, Line 33, Column C) you received during the year exceeds the actual credit calculated on Form 8962, Line 24.
Net Premium Tax Credit
- Where it's calculated: Line 26 of Form 8962
- Where it's reported: Line 9 of Schedule 3 (Form 1040)
(or Line 65 of Form 1040-NR) - What it means: This is the refundable portion of the premium tax credit that increases your refund or reduces the amount you owe.
Individual Shared Responsibility Payment
- Note: This payment is no longer in effect for tax years 2020 and beyond.
- Previously: It was a fee charged if you lacked qualified health coverage for all 12 months of the tax year and did not qualify for an exemption.
IRS Forms and Publications
Form 8962 – Premium Tax Credit (PTC)
Used to:
- Calculate your Premium Tax Credit
- Reconcile the credit with any advance payments received
If you received more advance PTC than eligible, you may have to repay the excess. If eligible for more, you'll claim a Net PTC.
Form 1095-A – Health Insurance Marketplace Statement
- Reports information on coverage purchased through the Health Insurance Marketplace
- Not submitted with your federal return, but required to complete Form 8962
You must file Form 8962 if:
- You received advance premium tax credit payments
- You are claiming the PTC on your return
Publication 974 – Premium Tax Credit (PTC)
Provides additional guidance on:
- Determining minimum essential coverage
- Special situations (e.g., marriage during the year, self-employment)
- Penalty relief and alternative calculation methods
Note
Any links provided in this section are automatically updated each year and will direct you to the most current version of the applicable IRS webpage or document.