What this line means
The smaller of line 27 (excess advance PTC) or line 28 (repayment limitation). This is the actual amount you add to your tax because you received more in advance premium tax credits than you qualified for. Enter this amount on Schedule 2, line 2, which flows to Form 1040, line 17 as part of your total tax.
Does this apply to you?
- You have an amount on line 27 and need to determine the final repayment
- Your advance premium tax credits exceeded your actual credit based on your final income
- You need to know how much to add to your tax on Schedule 2
Easy to overlook
This repayment reduces your refund but is not a separate bill The excess APTC repayment is added to your total tax on Form 1040. If you are otherwise getting a refund, this amount reduces it. If you already owe, it increases what you owe. Either way, it settles through your return — the IRS does not send a separate bill for the excess advance PTC. Filers sometimes expect a separate payment notice, but the reconciliation happens entirely on the return. 1 IRS Form 8962 Instructions — Line 29
You can avoid this repayment in future years by updating the Marketplace promptly The excess arises because your advance payments were based on an outdated income estimate. If your income increases during the year, reporting the change to the Marketplace through healthcare.gov or your state exchange reduces your monthly advance payments going forward. This prevents a buildup of excess credits that you must repay at filing time. 2 General filing pattern — excess APTC repayment reduces refund
Watch out for this
Not filing your return because you owe a repayment. If you received advance PTC and do not file Form 8962, the IRS holds any refund you would otherwise receive and sends notices requesting the form. The repayment does not go away by not filing. Filing on time, even if you owe, avoids penalties and interest on top of the repayment amount.
Footnotes
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IRS Form 8962 Instructions, Line 29. https://www.irs.gov/instructions/i8962 ↩
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IRS Publication 974, Premium Tax Credit, Repaying Excess Advance Payments. https://www.irs.gov/pub/irs-pdf/p974.pdf ↩