Advance Premium Tax Credit (APTC) received in excess of what the taxpayer is allowed typically needs to be repaid. If the taxpayer in question got married during the tax year and their new "tax family" includes an individual with marketplace insurance who received APTC, Part V of Form 8962 may be used to reduce the amount of excess APTC to be repaid.
Why would I use the alternative calculation?
Electing the alternative calculation is optional, but may reduce the amount of excess APTC you must repay. However, not everyone qualifies to use Part V Alternative Calculation for Year of Marriage.
Am I eligible for the Alternative Calculation for Year of Marriage?
To be eligible to use the alternative calculation, you must answer yes to ALL the following:
- Were you and your spouse each unmarried on January 1?
- Were you married by December 31?
- Are you filing a joint return with your spouse?
- Was anyone in your tax family enrolled in a qualified health plan before your first full month of marriage? (For example, if you got married on July 15, your first full month of marriage was August.)
- More APTC was paid during the tax year than should have been paid according to Worksheet 3, found in Form 8962's instructions.
If you do not meet the above conditions, you are not eligible to elect the alternative calculation.
Step One: Learn if there is advance PTC that must be repaid
To accomplish this, report your Form 1095-A(s) within the software without selecting the alternative calculation. After your 1095-A(s) are reported, navigate to the Summary/Print section and select Tax and Credits. Check the "Excess advance premium tax credit repayment" listing for an amount.
Step Two: Figuring the entries needed to claim the Alternative Year of Marriage Calculation (Part V)
Before completing Part V within our software, you must calculate the following:
- Alternative family size
- Alternative monthly contribution amount
- Alternative start and stop months
Note: Only make the entries in the program for the spouse that had marketplace insurance. If both spouse's had marketplace insurance, complete the entries for each spouse separately.
The alternative family size for the taxpayer and the spouse is the size of each family prior to marriage. If there are no dependents, then the alternative family size for each is 1. Otherwise dependents are added to the alternative family size for whichever family they resided in prior to marriage.
To determine the alternative monthly contribution amount, see below for calculations.
The alternative start month is the first month in which the taxpayer had marketplace insurance while the alternative stop month is the either the last month having marketplace insurance or the month of the marriage, whichever is earliest. For example if a taxpayer and spouse were married in August and the taxpayer had marketplace insurance all year, the alternative start month would be January and the alternative stop month would be August.
Step Three: Complete Part V within your return
To complete Part V of Form 8962, please follow the steps listed below.
- Navigate to the Health Insurance section
- Answer yes, then continue
- Verify household members and continue
- Select Alternative calculation for year of marriage (8962, Part V) and complete the applicable boxes using the information you determined in Step 2.
Figuring the Alternative Monthly Contribution Amount
To figure the Alternative Monthly Contribution Amount: (round all amounts to the nearest dollar)
- Divide your total income by the alternative family size (above)
- Find the applicable percentage for the amount on your 8962 Form line 5 (before the alternative calc for year of marriage) by visiting the 8962 instructions (Table 2)
- Multiply the income in Step 1 by the applicable percentage in step 3
- Divide the amount in Step 4 by 12 (months)
- Enter this amount as the Alternative Monthly Contribution Amount for the person who had marketplace insurance
- Repeat if both taxpayers had marketplace insurance before marriage and have separate 1095-A forms.
Example:
George and Marie got married in June of 2024. Their combined income on the return is $76,000. Marie has a child from a previous marriage on her 1095-A.
- Marie's Alternative family size is 2 while George's is 1.
- The alternative monthly contributions is figured as follows:
- $76,000 Divided by 3 (Marie's and George's combined) = $25,333 (round to nearest dollar)
- Current 8962 Line 5 amount is 305%
- 8962 Instructions, Table 2 figure for 305% is .0613
- $25,333 X .0613 = $1,553
- $1,553 Divided by 12 = $129
- Enter $129 as the Alternative Monthly Contribution Amount for the person who had marketplace insurance
Alternatively, you can complete the steps as outlined in Publication 974.Worksheets in Publication 974.