What this line means
If your total premium tax credit (line 24) is more than the advance payments you received (line 25), the difference goes here. This is additional credit you earned but did not receive during the year. It either increases your refund or reduces the tax you owe. Enter this amount on Schedule 3, line 9, which flows to Form 1040.
Does this apply to you?
- Your actual PTC on line 24 exceeds the advance payments on line 25
- Your income was lower than what you estimated when you enrolled in Marketplace coverage
- You paid full premiums without any advance credits and now want to claim the PTC on your return
- You gained a dependent during the year, increasing your tax family size and your credit
Easy to overlook
This credit is refundable — it can generate a refund even if you owe no tax The net PTC on this line flows through Schedule 3 as a refundable credit. Unlike nonrefundable credits that can only reduce your tax to zero, this one can produce a cash refund. Filers with low income who owe little or no tax still receive the full amount as a refund. 1 IRS Form 8962 Instructions — Line 26
Filers who paid full price all year get the entire credit here If you enrolled in a Marketplace plan and chose not to receive advance payments — paying the full premium each month — your line 25 is zero and your entire PTC appears on this line. The credit is the same whether you take it in advance or at filing time. Some filers prefer this approach to avoid a potential repayment, and they receive the full credit as a lump sum on their return. 2 IRS Publication 974 — Premium Tax Credit
Watch out for this
Forgetting to carry this amount to Schedule 3, line 9. The credit does not automatically appear on Form 1040. You must enter line 26 on Schedule 3, line 9, which then flows to Form 1040, line 31 as part of total other payments and refundable credits. If you complete Form 8962 but do not transfer the amount to Schedule 3, you lose the credit.
Footnotes
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IRS Form 8962 Instructions, Line 26. https://www.irs.gov/instructions/i8962 ↩
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IRS Publication 974, Premium Tax Credit, Claiming the Credit on Your Return. https://www.irs.gov/pub/irs-pdf/p974.pdf ↩