Department of the Treasury
Internal Revenue Service
Publication 974
Cat. No. 66452Q
Premium Tax
Credit (PTC)
For use in preparing
2021 Returns
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Contents
Future Developments . . . . . . . . . . . . . . . . . . . . . . . 1
What’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
What Is the Premium Tax Credit (PTC)? . . . . . . . . . 3
Who Must File Form 8962 . . . . . . . . . . . . . . . . . . . . 4
Who Can Take the PTC . . . . . . . . . . . . . . . . . . . . . . 4
Terms You May Need To Know . . . . . . . . . . . . . . . 4
Minimum Essential Coverage (MEC) . . . . . . . . . . . 8
Individuals Not Lawfully Present in the United
States Enrolled in a Qualified Health Plan . . . 19
Determining the Premium for the Applicable
Second Lowest Cost Silver Plan (SLCSP) . . . 27
Allocating Policy Amounts for Individuals With
No One in Their Tax Family . . . . . . . . . . . . . . 27
Allocation of Policy Amounts Among Three or
More Taxpayers . . . . . . . . . . . . . . . . . . . . . . . 28
Alternative Calculation for Year of Marriage . . . . 38
Self-Employed Health Insurance Deduction
and PTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
How To Get Tax Help . . . . . . . . . . . . . . . . . . . . . . 76
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Future Developments
For the latest information about developments related to
Pub. 974, such as legislation enacted after it was
published, go to IRS.gov/Pub974.
What’s New
Unemployment compensation. For an individual who
received, or is approved to receive, unemployment com-
pensation for any week during 2021, the amount of house-
hold income is considered to be no greater than 133% of
the federal poverty line.
Applicable federal poverty line percentages. For tax
years 2021 and 2022, the PTC is available to taxpayers
with household incomes that exceed 400% of the federal
poverty line.
Reminders
Health reimbursement arrangements (HRAs). Begin-
ning in 2020, employers can offer individual coverage
Mar 04, 2022
health reimbursement arrangements (individual coverage
HRAs) to help employees and their families with their
medical expenses. If you are offered an individual cover-
age HRA, see Individual Coverage HRAs, later, for more
information on whether you can claim a PTC for you or a
member of your family for Marketplace coverage.
Qualified small employer health reimbursement ar-
rangement (QSEHRA). Under a QSEHRA, an eligible
employer can reimburse eligible employees for medical
expenses, including premiums for Marketplace health in-
surance. If you were provided a QSEHRA, your employer
should have reported the annual permitted benefit in
box 12 of your Form W-2 with code FF. If the QSEHRA is
considered affordable coverage for a month, no premium
tax credit (PTC) is allowed for the month. If the QSEHRA
is not considered affordable coverage for a month, you
may still be eligible for the PTC but you must reduce the
monthly PTC (but not below -0-) by the monthly permitted
benefit amount. For more information, see Qualified Small
Employer Health Reimbursement Arrangement, later.
Requirement to reconcile advance payments of the
premium tax credit. If you, your spouse with whom you
are filing a joint return, or a dependent was enrolled in
coverage through the Marketplace for 2021 and advance
payments of the premium tax credit (APTC) were made
for this coverage, you must file a 2021 return and attach
Form 8962 to claim a net PTC. You (or whoever enrolled
you) should have received Form 1095-A, Health Insur-
ance Marketplace Statement, from the Marketplace with
information about your coverage and any APTC. You
must attach Form 8962 even if someone else enrolled
you, your spouse, or your dependent. If you are a depend-
ent who is claimed on someone else's 2021 return, you do
not have to attach Form 8962.
Report changes in circumstances when you re-enroll
in coverage and during the year. If APTC is being paid
for an individual in your tax family (defined later) and you
have had certain changes in circumstances (see the ex-
amples below), it is important that you report them to the
Marketplace where you enrolled in coverage. Reporting
changes in circumstances promptly will allow the Market-
place to adjust your APTC to reflect the PTC you are esti-
mated to be able to take on your tax return. Adjusting your
APTC when you re-enroll in coverage and during the year
can help you avoid owing tax when you file your tax return.
Changes that you should report to the Marketplace in-
clude the following.
• Changes in household income.
• Moving to a different address.
• Gaining or losing eligibility for other health care cover-
age.
• Gaining, losing, or other changes to employment.
• Birth or adoption.
• Marriage or divorce.
• Other changes affecting the composition of your tax
family.
For more information on how to report a change in
circumstances to the Marketplace, visit HealthCare.gov or
your State Marketplace website.
Health coverage tax credit (HCTC). The HCTC is a tax
credit that is calculated based on a percentage of health
insurance premiums for coverage of eligible taxpayers
and their qualifying family members. The HCTC and the
PTC are different tax credits that have different eligibility
rules. If you think you may be eligible for the HCTC, see
Form 8885 and its instructions or visit IRS.gov/HCTC be-
fore completing Form 8962.
Health insurance options. If you need health coverage,
go to HealthCare.gov to learn about health insurance op-
tions that are available for you and your family, how to pur-
chase health insurance, and how you might qualify to get
financial assistance with the cost of insurance.
Additional information. For additional information about
the tax provisions of the Affordable Care Act (ACA), in-
cluding the individual shared responsibility provisions and
the PTC, see IRS.gov/Affordable-Care-Act/Individuals-
and-Families or call the IRS Healthcare Hotline for ACA
questions (800-919-0452).
Photographs of missing children. The Internal Reve-
nue Service is a proud partner with the National Center for
Missing & Exploited Children® (NCMEC). Photographs of
missing children selected by the Center may appear in
this publication on pages that would otherwise be blank.
You can help bring these children home by looking at the
photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.
Introduction
This publication covers the following general topics, relat-
ing to the premium tax credit (PTC), which are also cov-
ered in the Form 8962 instructions.
• What is the PTC?
• Who must file Form 8962.
• Who can take the PTC. (See Figure A—Can You Take
the PTC, later.)
This publication also provides additional instructions for
taxpayers in the following special situations.
• Taxpayers who take the PTC and who are filing a sep-
arate return from their spouses because of domestic
abuse or spousal abandonment.
• Taxpayers who take the PTC and who are also provi-
ded a QSEHRA.
• Taxpayers who need to calculate the PTC and APTC
for a policy that covered an individual not lawfully
present in the United States.
• Taxpayers who need to determine the applicable sec-
ond lowest cost silver plan (SLCSP) premium.
• Taxpayers who need to allocate policy amounts for in-
dividuals not included in any tax family.
Page 2 Publication 974 (2021)
• Taxpayers who need to allocate policy amounts be-
cause one qualified health plan covers individuals
from three or more tax families in the same month.
• Taxpayers who married during the tax year and want
to use an alternative PTC calculation that may lower
their taxes.
• Self-employed taxpayers who wish to take the PTC
and the self-employed health insurance deduction.
This publication also provides additional information to
help you determine if your health care coverage is mini-
mum essential coverage (MEC).
Comments and suggestions. We welcome your com-
ments about this publication and suggestions for future
editions.
You can send us comments through IRS.gov/
FormComments. Or, you can write to the Internal Reve-
nue Service, Tax Forms and Publications, 1111 Constitu-
tion Ave. NW, IR-6526, Washington, DC 20224.
Although we can’t respond individually to each com-
ment received, we do appreciate your feedback and will
consider your comments and suggestions as we revise
our tax forms, instructions, and publications. Don’t send
tax questions, tax returns, or payments to the above ad-
dress.
Getting answers to your tax questions. If you have
a tax question not answered by this publication or the How
To Get Tax Help section at the end of this publication, go
to the IRS Interactive Tax Assistant page at IRS.gov/
Help/ITA where you can find topics by using the search
feature or viewing the categories listed.
Getting tax forms, instructions, and publications.
Go to IRS.gov/Forms to download current and prior-year
forms, instructions, and publications.
Ordering tax forms, instructions, and publications.
Go to IRS.gov/OrderForms to order current forms, instruc-
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Don’t resubmit requests you’ve already sent us. You can
get forms and publications faster online.
Questions about Form 1095-A, Health Insurance
Marketplace Statement. If you or a member of your tax
family was enrolled in a qualified health plan through a
Marketplace in 2021, you should have received a Form
1095-A by early February 2022. Contact your Marketplace
if you do not receive a Form 1095-A or if you have ques-
tions about the accuracy of your Form 1095-A.
Useful Items
You may want to see:
Publication
535 Business Expenses (Self-employed individuals
may need to see chapter 6.)
Form (and Instructions)
1095-A Health Insurance Marketplace Statement
1095-B Health Coverage
1095-C Employer-Provided Health Insurance Offer
and Coverage
8885 Health Coverage Tax Credit
8962 Premium Tax Credit (PTC)
See How To Get Tax Help, near the end of this publica-
tion, for information about getting publications and forms.
What Is the Premium Tax
Credit (PTC)?
Premium tax credit (PTC). The PTC is a tax credit for
certain people who enroll, or whose family member en-
rolls, in a qualified health plan offered through a Market-
place. The credit provides financial assistance to pay the
premiums for the qualified health plan by reducing the
amount of tax you owe, giving you a refund, or increasing
your refund amount. You must file Form 8962 to compute
and take the PTC on your tax return.
Advance payments of the premium tax credit (APTC).
The APTC is a payment made during the year to your in-
surance provider that pays for part or all of the premiums
for a qualified health plan covering you or an individual in
your tax family. Your APTC eligibility is based on the Mar-
ketplace’s estimate of the PTC you will be able to take on
your tax return. If APTC was paid for you or an individual
in your tax family, you must file Form 8962 to reconcile
(compare) this APTC with your PTC. If the APTC is more
than your PTC, you have excess APTC and you must re-
pay the excess, subject to certain limitations. If the APTC
is less than the PTC, you can get a credit for the differ-
ence, which reduces your tax payment or increases your
refund.
Changes in circumstances. The Marketplace deter-
mined your eligibility for, and the amount of, your 2021
APTC using projections of your income and the number of
individuals you certified to the Marketplace would be in
your tax family (yourself, spouse, and dependents) when
you enrolled in a qualified health plan. If this information
changed during 2021 and you did not promptly report it to
the Marketplace, the amount of APTC paid may be sub-
stantially different from the amount of PTC you can take
on your tax return. See Report changes in circumstances
when you re-enroll in coverage and during the year, ear-
lier, for changes that can affect the amount of your PTC.
1095-A
1095-B
1095-C
8885
8962
Publication 974 (2021) Page 3
Who Must File Form 8962
You must file Form 8962 with your income tax return
(Form 1040, 1040-SR, or 1040-NR) if any of the following
apply to you.
• You are taking the PTC.
• APTC was paid for you or another individual in your
tax family.
• APTC was paid for an individual you told the Market-
place would be in your tax family and neither you nor
anyone else included that individual in a tax family.
See Individual you enrolled who is not included in a
tax family under Lines 12 Through 23—Monthly Cal-
culation in the Form 8962 instructions.
If any of the circumstances above apply to you, you
must file an income tax return and attach Form 8962 even
if you are not otherwise required to file. You must use
Form 1040, 1040-SR, or 1040-NR. For help in determin-
ing which of these forms to file, see the Instructions for
Form 1040 or the Instructions for Form 1040-NR.
If you are filing Form 8962, you cannot file Form
1040-SS or 1040-PR.
If someone else enrolled an individual in your tax family
in coverage, and APTC was paid for that individual’s cov-
erage, you must file Form 8962 to reconcile the APTC.
You need to obtain a copy of the Form 1095-A from the
person who enrolled the individual.
If you are claimed as a dependent, the person
who claims you will file Form 8962 to take the
PTC and, if necessary, repay excess APTC for
your coverage. You do not need to file Form 8962.
Who Can Take the PTC
You can take the PTC for 2021 if you meet the conditions
under (1), (2), and (3) below.
1. For at least 1 month of the year, all of the following
were true.
a. An individual in your tax family was enrolled in a
qualified health plan offered through the Market-
place on the first day of the month.
b. That individual was not eligible for MEC for the
month, other than individual market coverage. An
individual is generally considered eligible for MEC
for the month only if he or she was eligible for ev-
ery day of the month (see Minimum Essential Cov-
erage, later).
c. The portion of the enrollment premiums (descri-
bed later) for the month for which you are respon-
sible was paid by the due date of your tax return
(not including extensions). However, if youCAUTION
!TIP
became eligible for APTC because of a successful
eligibility appeal and you retroactively enrolled in
the plan, then the portion of the enrollment pre-
mium for which you are responsible must be paid
on or before the 120th day following the date of
the appeals decision.
2. No one can claim you as a dependent for the year.
3. You are an applicable taxpayer for 2021. To be an ap-
plicable taxpayer, you must meet all of the following
requirements.
a. You, or your spouse if filing a joint return, received
or were approved to receive unemployment com-
pensation for any week beginning during 2021, or
your household income for 2021 is at least 100%
of the federal poverty line for your family size (see
Line 4 in the Form 8962 instructions). However,
having household income below 100% of the fed-
eral poverty line will not disqualify you from taking
the PTC if you meet certain requirements descri-
bed under Household income below 100% of the
federal poverty line under Line 6 in the Form 8962
instructions.
b. If you were married at the end of 2021, you must
generally file a joint return. However, filing a sepa-
rate return from your spouse will not disqualify you
from being an applicable taxpayer if you meet cer-
tain requirements described under Married tax-
payers, later.
You are not entitled to the PTC for health coverage for
an individual for any period during which the individual is
not lawfully present in the United States.
For additional requirements and more details, see Ap-
plicable taxpayer, later.
Terms You May Need To Know
The terms defined below are generally the same as those
in the Form 8962 instructions. However, additional infor-
mation is provided below on what documentation to keep
if you are a victim of domestic abuse or spousal abandon-
ment and on minimum essential coverage, later.
Tax family. For purposes of the PTC, your tax family
consists of the following individuals.
• You, if you file a tax return for the year and you can't
be claimed as a dependent on someone else's 2021
tax return.
• Your spouse if filing jointly and he or she can't be
claimed as a dependent on someone else's 2021 tax
return.
• Your dependents whom you claim on your 2021 tax
return. If you are filing Form 1040-NR, you should in-
clude your dependents in your tax family only if you
are a U.S. national; resident of Canada, Mexico, or
South Korea; or a resident of India who was a student
or business apprentice.
Page 4 Publication 974 (2021)
Figure A. Can You Take the PTC?
This flowchart can help you determine whether you can take the PTC. But do not rely on this flowchart alone. Be sure
you read Who Can Take the PTC, discussed earlier, or in the Form 8962 instructions.Were any of the individuals included in your tax family enrolled in a qualified
health plan through the Marketplace for at least 1 month during 2021?
Were any of these individuals eligible for MEC (other than individual
market coverage) for the months they were enrolled in the qualified health
plan? (See Minimum Essential Coverage, later.)
Can someone else claim you as a dependent
on another tax return for 2021?
Were you married at the end of 2021?
Are you and your spouse filing a joint return?
Are you a victim of domestic abuse or spousal abandonment?
Do you meet the requirements for Married persons who live apart
under Head of Household in the Instructions for Form 1040, or
Were You Single or Married? in the Form 1040-NR instructions?
Was your household income at least 100% of the federal poverty
line for your family size? (See the Form 8962 instructions.)
You cannot take the PTC.
Yes
No
Start here
Yes
No
No
No
No
No
No
No
No
Yes Yes
Yes
Yes
Yes
Yes
Yes
Yes
Was APTC paid for 1 or more months during 2021?
Yes
You may be able to take the PTC. Was at least one individual enrolled in a qualified
health plan lawfully present in the United States?
Yes
Was at least one enrolled individual ineligible
for Medicaid due to immigration status?
Yes
Yes
At the time of enrollment, did the Marketplace estimate that your household income would be at least
100% of the federal poverty line for your family size for 2021?
Were all of these individuals eligible for MEC for
all of the months they were enrolled in the
qualified health plan?
No
Yes No
No
Was everyone in your tax family a U.S. citizen?
No
No
No
Were the premiums paid by the due date of
your tax return (not including extensions)?
(A different due date applies in the case of a
successful eligibility appeal. See Enrollment
premiums.)
Publication 974 (2021) Page 5
Your family size equals the number of qualifying indi-
viduals in your tax family (including yourself).
Note. Listing your dependents by name and social se-
curity number (SSN) or individual taxpayer identification
number (ITIN) on your tax return is the same as claiming
them as a dependent. If you have more than four depend-
ents, see the Instructions for Form 1040 or the Instructions
for Form 1040-NR.
Household income. For purposes of the PTC, house-
hold income is the modified adjusted gross income (modi-
fied AGI) of you and your spouse (if filing a joint return)
(see Line 2a in the Form 8962 instructions) plus the modi-
fied AGI of each individual whom you claim as a depend-
ent and who is required to file an income tax return be-
cause his or her income meets the income tax return filing
threshold (see Line 2b in the Form 8962 instructions).
Household income does not include the modified AGI of
those individuals whom you claim as dependents and who
are filing a 2021 return only to claim a refund of withheld
income tax or estimated tax. If you, or your spouse (if filing
a joint return), received, or were approved to receive, un-
employment compensation for any week beginning during
2021, your household income is considered to be no
greater than 133% of the federal poverty line for your fam-
ily size.
Modified AGI. For purposes of the PTC, modified AGI
is the AGI on your tax return plus certain income that is not
subject to tax (foreign earned income, tax-exempt inter-
est, and the portion of social security benefits that is not
taxable). Use Worksheet 1-1 and Worksheet 1-2 in the
Form 8962 instructions to determine your modified AGI.
Taxpayer's tax return including income of a de-
pendent child. A taxpayer who includes the gross in-
come of a dependent child on the taxpayer’s tax return
must include on Worksheet 1-2 the child’s tax-exempt in-
terest and the portion of the child’s social security benefits
that is not taxable.
Coverage family. Your coverage family includes all indi-
viduals in your tax family who are enrolled in a qualified
health plan and are not eligible for MEC (other than indi-
vidual market coverage). The individuals included in your
coverage family may change from month to month. If an
individual in your tax family is not enrolled in a qualified
health plan, or is enrolled in a qualified health plan but is
eligible for MEC (other than individual market coverage),
he or she is not part of your coverage family. Your PTC is
available to help you pay only for the coverage of the indi-
viduals included in your coverage family.
Monthly credit amount. The monthly credit amount is
the amount of your tax credit for a month. Your PTC for
the year is the sum of all of your monthly credit amounts.
Your credit amount for each month is the lesser of:
• The enrollment premiums (described next) for the
month for one or more qualified health plans in which
you or any individual in your tax family enrolled, or
• The amount of the monthly applicable SLCSP pre-
mium (described later) less your monthly contribution
amount (described later).
To qualify for a monthly credit amount, at least one indi-
vidual in your tax family must be enrolled in a qualified
health plan on the first day of that month. Generally, if cov-
erage in a qualified health plan began after the first day of
the month, you are not allowed a monthly credit amount
for the coverage for that month. However, if an individual
in your tax family enrolled in a qualified health plan in 2021
and the enrollment was effective on the date of the individ-
ual's birth, adoption, or placement for adoption or in foster
care, or on the effective date of a court order placing the
individual with your family, the individual is treated as en-
rolled as of the first day of that month. Therefore, the indi-
vidual may be a member of your tax family and coverage
family for the entire month for purposes of computing your
monthly credit amount.
Enrollment premiums. The enrollment premiums are
the total amount of the premiums for the month, reduced
by any premium amounts for that month that were refun-
ded, for one or more qualified health plans in which any in-
dividual in your tax family enrolled. Form 1095-A, Part III,
column A, reports the enrollment premiums.
You are generally not allowed a monthly credit amount
for the month if any part of the enrollment premiums for
which you are responsible that month has not been paid
by the due date of your tax return (not including exten-
sions). However, if you became eligible for APTC because
of a successful eligibility appeal and you retroactively en-
rolled in the plan, the portion of the enrollment premium
for which you are responsible must be paid on or before
the 120th day following the date of the appeals decision.
Premiums another person pays on your behalf are treated
as paid by you.
If your share of the enrollment premiums is not paid, the
issuer may terminate coverage. The termination is gener-
ally effective no sooner than the second month of nonpay-
ment. For any months you were covered but did not pay
your share of the premiums, you are not allowed a
monthly credit amount.
Applicable SLCSP premium. The applicable SLCSP
premium is the second lowest cost silver plan premium of-
fered through the Marketplace where you reside that ap-
plies to your coverage family (described earlier). The
SLCSP premium is not the same as your enrollment pre-
mium unless you enroll in the applicable SLCSP. Form
1095-A, Part III, column B, generally reports the applica-
ble SLCSP premium. If no APTC was paid for your cover-
age, Form 1095-A, Part III, column B, may be wrong or
blank or may report your applicable SLCSP premium
as -0-. Also, if you had a change in circumstances during
2021 that you did not report to the Marketplace, the
SLCSP premium reported on Form 1095-A in Part III, col-
umn B, may be wrong. In either case, you must determine
your correct applicable SLCSP premium. You do not have
to request a corrected Form 1095-A from the Marketplace.
See Missing or incorrect SLCSP premium on Form
1095-A under Line 10 in the Form 8962 instructions.
Page 6 Publication 974 (2021)
Monthly contribution amount. Your monthly contri-
bution amount is used to calculate your monthly credit
amount. It is the amount of your household income you
would be responsible for paying as your share of premi-
ums each month if you enrolled in the applicable SLCSP.
It is not based on the amount of premiums you paid out of
pocket during the year. You will compute your monthly
contribution amount in Part I of Form 8962.
Qualified health plan. For purposes of the PTC, a quali-
fied health plan is a health insurance plan or policy pur-
chased through a Marketplace at the bronze, silver, gold,
or platinum level. Throughout this publication, a qualified
health plan is also referred to as a “policy.” Catastrophic
health plans and stand-alone dental plans purchased
through the Marketplace, and all plans purchased through
the Small Business Health Options Program (SHOP), are
not qualified health plans for purposes of the PTC. There-
fore, they do not qualify a taxpayer to take the PTC.
Applicable taxpayer. You must be an applicable tax-
payer to take the PTC. Generally, you are an applicable
taxpayer for 2021 if:
1. Your household income for 2021 (described earlier) is
at least 100% of the federal poverty line for your fam-
ily size (provided in Tables 1-1, 1-2, and 1-3 in the
Form 8962 instructions); or
2. You, or your spouse (if filing a joint return), received,
or were approved to receive, unemployment compen-
sation for any week beginning during 2021.
However, if you were married at the end of 2021, you
must file a joint return to be an applicable taxpayer unless
you meet one of the exceptions described under Married
taxpayers, later. In addition, you are not allowed a PTC if
someone can claim you as a dependent for 2021.
For individuals with household income below 100% of
the federal poverty line, see Household income below
100% of the federal poverty line under Line 5 in the Form
8962 instructions. However, the exception described un-
der Estimated household income at least 100% of the fed-
eral poverty line in the Form 8962 instructions does not
apply if, with intentional or reckless disregard for the facts,
you provide incorrect information to the Marketplace for
the year of coverage. You provide information with inten-
tional disregard for the facts if you know that the informa-
tion provided is inaccurate. You provide information with a
reckless disregard for the facts if you make little or no ef-
fort to determine whether the information provided is ac-
curate and your lack of effort to provide accurate informa-
tion is substantially different from what a reasonable
person would do under the circumstances.
Individuals who are incarcerated. Individuals who are
incarcerated (other than pending disposition of charges,
for example, awaiting trial) are not eligible for coverage in
a qualified health plan through a Marketplace. However,
these individuals may be applicable taxpayers and take
the PTC for the coverage of individuals in their tax families
who are eligible for coverage in a qualified health plan.
Individuals who are not lawfully present. Individuals
who are not lawfully present in the United States are not
eligible for coverage in a qualified health plan through a
Marketplace. They cannot take the PTC for their own cov-
erage and are not eligible for the repayment limitations in
Table 5 (in the Form 8962 instructions) for APTC paid for
their own coverage. However, these individuals may be
applicable taxpayers and take the PTC for the coverage of
individuals in their tax families, such as their children, who
are lawfully present and eligible for coverage in a qualified
health plan. For more information about who is treated as
lawfully present for this purpose, visit HealthCare.gov.
See Individuals Not Lawfully Present in the United States
Enrolled in a Qualified Health Plan, later, for more infor-
mation on reconciling APTC when an unlawfully present
person is enrolled individually or with lawfully present fam-
ily members.
Married taxpayers. If you are considered married for
federal income tax purposes, you must file a joint return
with your spouse to take the PTC unless one of the two
exceptions below applies to you.
You are not considered married for federal income tax
purposes if you are divorced or legally separated accord-
ing to your state law under a decree of divorce or separate
maintenance. In that case, you cannot file a joint return
but may be able to take the PTC on your separate return.
See Pub. 501, Dependents, Standard Deduction, and Fil-
ing Information.
If you are considered married for federal income tax
purposes, you may be eligible to take the PTC without fil-
ing a joint return if one of the two exceptions below ap-
plies to you. If Exception 1 applies, you can file a return
using head of household or single filing status and take
the PTC. If Exception 2 applies, you are treated as mar-
ried but can take the PTC with the filing status of married
filing separately.
Exception 1—Certain married persons living apart.
You may file your return as if you are unmarried and take
the PTC if one of the following applies to you.
• You file a separate return from your spouse on Form
1040 or 1040-SR because you meet the requirements
for Married persons who live apart under Head of
Household in the Instructions for Form 1040.
• You file as single on your Form 1040-NR because you
meet the requirements for Married persons who live
apart under Were You Single or Married? in the In-
structions for Form 1040-NR.
Exception 2—Victim of domestic abuse or spousal
abandonment. If you are a victim of domestic abuse or
spousal abandonment, you can file a return as married fil-
ing separately and take the PTC for 2021 if all of the fol-
lowing apply to you.
• You are living apart from your spouse at the time you
file your 2021 tax return.
• You are unable to file a joint return because you are a
victim of domestic abuse (described next) or spousal
abandonment (described below).
Publication 974 (2021) Page 7
• You check the box on your Form 8962 to certify that
you are a victim of domestic abuse or spousal aban-
donment.
• You have not used this exception to take the PTC in
each of 2018, 2019, and 2020.
Domestic abuse. Domestic abuse includes physical,
psychological, sexual, or emotional abuse, including ef-
forts to control, isolate, humiliate, and intimidate, or to un-
dermine the victim's ability to reason independently. All
the facts and circumstances are considered in determin-
ing whether an individual is abused, including the effects
of alcohol or drug abuse by the victim’s spouse. Depend-
ing on the facts and circumstances, abuse of an individu-
al’s child or other family member living in the household
may constitute abuse of the individual.
Spousal abandonment. A taxpayer is a victim of
spousal abandonment for a tax year if, taking into account
all facts and circumstances, the taxpayer is unable to lo-
cate his or her spouse after reasonable diligence.
Records of domestic abuse and spousal abandon-
ment. If you checked the box in the upper right corner of
Form 8962 indicating that you are eligible for the PTC de-
spite having a filing status of married filing separately, you
should keep records relating to your situation, like with all
aspects of your tax return. What you have available may
depend on your circumstances. However, the following list
provides some examples of records that may be useful.
(Do not attach these records to your tax return.)
• Protective and/or restraining order.
• Police report.
• Doctor’s report or letter.
• A statement from someone who was aware of, or who
witnessed, the abuse or the results of the abuse. The
statement should be notarized if possible.
• A statement from someone who knows of the aban-
donment. The statement should be notarized if possi-
ble.
Married filing separately. If you file as married filing
separately and are not a victim of domestic abuse or
spousal abandonment (see Exception 2—Victim of do-
mestic abuse or spousal abandonment under Married tax-
payers, earlier), then you are not an applicable taxpayer
and you cannot take the PTC. You must generally repay
all of the APTC paid for a qualified health plan that cov-
ered only individuals in your tax family. If the policy also
covered at least one individual in your spouse’s tax family,
you must generally repay half of the APTC paid for the
policy. See Line 9 in the Form 8962 instructions. However,
the amount of APTC you have to repay may be limited.
See Line 28 in the Form 8962 instructions.
Minimum Essential Coverage
(MEC)
Under the health care law, certain health coverage is
called MEC. You generally cannot take the PTC for an in-
dividual in your tax family for any month that the individual
is eligible for MEC, except for individual market coverage
(defined below). MEC includes the following.
• Individual market coverage (including qualified health
plans).
• Most coverage through government-sponsored pro-
grams (including Medicaid coverage, Medicare Part A
or C, the Children's Health Insurance Program (CHIP),
certain benefits for veterans and their families, TRI-
CARE, and health coverage for Peace Corps volun-
teers).
• Most types of employer-sponsored coverage.
• Grandfathered health plans.
• Other health coverage designated by the Department
of Health and Human Services (HHS) as MEC.
MEC does not include coverage consisting solely
of excepted benefits. Excepted benefits include
vision and dental coverage not part of a compre-
hensive health insurance plan, workers’ compensation
coverage, and coverage limited to a specified disease or
illness.
For more information on what is MEC, see IRS.gov/
Affordable-Care-Act/Individuals-and-Families/Individual-
Shared-Responsibility-Provision.
Note. Your MEC may be reported to you on Form
1095-A, Form 1095-B, or Form 1095-C.
MEC eligibility when Marketplace does not discon-
tinue APTC. If an individual in your tax family is enrolled
in a qualified health plan for which APTC was made and
the individual is or will soon become eligible for other
MEC, you must notify the Marketplace about the other
MEC and that the APTC for the individual’s coverage
should be discontinued. If the Marketplace does not dis-
continue APTC for the first calendar month beginning after
the month you notify the Marketplace, the individual is
treated as eligible for the other MEC no earlier than the
first day of the second calendar month beginning after the
first month the individual may enroll in the other MEC. A
different rule applies to Medicaid and CHIP eligibility, dis-
cussed later under Government-Sponsored Programs.
Expatriate Health Plans
In general, an expatriate health plan is certain health in-
surance coverage that is offered to foreign nationals who
are temporarily assigned for work in the United States,
U.S. residents who are temporarily working outside of the
United States, and certain nonemployees (such asTIP
Page 8 Publication 974 (2021)
students and missionaries) who are traveling internation-
ally. To qualify, the health insurance coverage must gen-
erally offer a minimum level of benefits in the region in
which the covered individual is temporarily located and be
offered by a qualifying expatriate health insurance issuer.
An expatriate health plan is considered employer-spon-
sored coverage for a primary insured who receives it
through his or her employer (and for that employee’s cov-
ered dependents). It is considered individual market cov-
erage for any other primary insured.
Individual Market Coverage
A health plan offered in the individual market is health in-
surance coverage provided to an individual by a health in-
surance issuer licensed by a state, including a qualified
health plan offered through the Marketplace. Even though
these plans are MEC, eligibility for individual market cov-
erage does not prevent an individual from qualifying for
the PTC for coverage in a qualified health plan purchased
through the Marketplace.
Individual market coverage also includes coverage un-
der certain expatriate health plans offered to students and
religious missionaries traveling internationally. See Expa-
triate Health Plans, earlier.
Government-Sponsored Programs
The following government-sponsored programs are MEC.
1. Medicare Part A coverage.
2. Medicare Advantage plans.
3. Medicaid, except for the following programs.
a. Optional coverage of family planning services.
b. Optional coverage of tuberculosis-related serv-
ices.
c. Coverage of pregnancy-related services in states
that do not provide full Medicaid benefits on the
basis of pregnancy.
d. Coverage limited to the treatment of emergency
medical conditions.
e. Coverage of medically needy individuals (except
for coverage for medically needy individuals that
HHS has designated as MEC—see Other Cover-
age Designated by the Department of Health and
Human Services, later).
f. Coverage under a section 1115 demonstration
waiver program (except for coverage under a sec-
tion 1115 demonstration program that HHS has
designated as MEC—see Other Coverage Desig-
nated by the Department of Health and Human
Services, later).
Call your state Medicaid office if you have any
questions about the coverage you have.
4. The Children's Health Insurance Program (CHIP), ex-
cept certain CHIP coverage for pregnancy services.
(Certain coverage often called a “CHIP buy-in pro-
gram” is not considered a government-sponsored
program and is discussed later under Other Coverage
Designated by the Department of Health and Human
Services.)
5. Coverage under the TRICARE program, except for
the following programs.
a. Coverage on a space-available basis in a military
treatment facility for individuals who are not eligi-
ble for TRICARE coverage for private sector care.
b. Coverage for a line-of-duty-related injury, illness,
or disease for individuals who have left active
duty.
6. The following coverage administered by the Depart-
ment of Veterans Affairs.
a. Coverage consisting of the medical benefits pack-
age for eligible veterans.
b. Civilian Health and Medical Program of the De-
partment of Veterans Affairs (CHAMPVA).
c. Comprehensive health care for children suffering
from spina bifida who are the children of Vietnam
veterans and veterans of covered service in Ko-
rea.
7. Health coverage provided to Peace Corps volunteers.
8. Refugee Medical Assistance.
9. Coverage through a Basic Health Program (BHP)
standard health plan.
In general, you cannot get the PTC for your coverage in
a qualified health plan if you are eligible for govern-
ment-sponsored MEC. You are generally considered eligi-
ble for a government-sponsored program if you meet the
criteria for coverage under the program. But see Excep-
tions, later. However, you will not lose the PTC for your
coverage until the first day of the first full month you can
receive benefits under the government program. If you
can be covered under a government-sponsored program,
you must complete the requirements necessary to receive
benefits (for example, submitting an application or provid-
ing required information) by the last day of the third full
calendar month following the event that establishes eligi-
bility (for example, becoming eligible for Medicare when
you turn 65). If you do not complete the necessary re-
quirements in this time, you will lose the PTC for your cov-
erage in a qualified health plan beginning with the first day
of the fourth calendar month following the event that
makes you eligible for the government coverage.
Example 1. Ellen was enrolled in a qualified health
plan with APTC. She turned 65 on June 3 and became eli-
gible for Medicare. Ellen must apply to Medicare to re-
ceive benefits. She applied to Medicare in September and
was eligible to receive Medicare benefits beginning on
December 1. Ellen completed the requirements necessary
to receive Medicare benefits by September 30 (the last
day of the third full calendar month after the event that es-
tablished her eligibility, turning 65). She was eligible for
Publication 974 (2021) Page 9
Medicare coverage on December 1, the first day of the
first full month that she could receive benefits. Thus, Ellen
can get the PTC for her coverage in the qualified health
plan for January through November. Beginning in Decem-
ber, Ellen cannot get the PTC for her coverage in the
qualified health plan because she is eligible for Medicare.
Example 2. The facts are the same as in Example 1,
except that Ellen did not apply for the Medicare coverage
by September 30. Ellen is considered eligible for govern-
ment-sponsored coverage beginning on October 1. She
can get the PTC for her coverage for January through
September. She cannot get the PTC for her coverage in a
qualified health plan as of October 1, the first day of the
fourth month after she turned 65.
Exceptions. While you are generally considered eligible
for government-sponsored MEC (and are ineligible for the
PTC) if you are able to enroll in that coverage, you are
considered eligible for government-sponsored coverage
under the following programs only if you are enrolled in
the program.
1. A veteran’s health care program listed in (6), earlier.
2. The following TRICARE programs.
a. The Continued Health Care Benefit Program.
b. Retired Reserve.
c. Young Adult.
d. Reserve Select.
3. Medicaid coverage for comprehensive pregnancy-re-
lated services and CHIP coverage based on preg-
nancy, if the individual is enrolled in a qualified health
plan at the time she becomes eligible for Medicaid or
CHIP.
4. Coverage under Medicare Part A for which the indi-
vidual must pay a premium.
In addition, an individual is considered eligible for MEC
under a Medicaid or Medicare program for which eligibility
requires a determination of disability, blindness, or illness
only when the responsible agency makes a favorable eli-
gibility determination.
Retroactive coverage. If APTC is being paid for cover-
age in a qualified health plan and you become eligible for
government coverage that is effective retroactively (such
as Medicaid or CHIP), you will not retroactively lose the
PTC for your coverage. You can get the PTC for your cov-
erage until the first day of the first calendar month after
you are approved for the government coverage.
Example. In November, Freda enrolled in a qualified
health plan for the following year and got APTC for her
coverage. Freda lost her part-time job and on April 10 ap-
plied for coverage under the Medicaid program. Freda’s
application was approved on May 15, with Medicaid cov-
erage retroactively effective April 1. For purposes of the
PTC, Freda is considered eligible for government-spon-
sored coverage on June 1, the first day of the first calen-
dar month after her application was approved. Freda may
be eligible for the PTC for January through May.
Termination for nonpayment of premiums. If Med-
icaid or CHIP coverage for you or a family member is ter-
minated due to nonpayment of premiums, you cannot get
the PTC for the coverage of that individual (for the remain-
der of the year of the termination).
Determining eligibility for Medicaid or CHIP at enroll-
ment. An individual is treated as ineligible for Medicaid,
CHIP, and similar programs (such as a BHP) for the pe-
riod of coverage under a qualified health plan if, when the
individual enrolled in the qualified health plan, the Market-
place determined that the individual was ineligible for
Medicaid or CHIP based on the applicable Medicaid and
CHIP income standards. However, this exception does
not apply if you, or the individual you are including in your
tax family, with intentional or reckless disregard for the
facts, provided incorrect information to the Marketplace
for the year of coverage. You provide information with in-
tentional disregard for the facts if you know that the infor-
mation provided is inaccurate. You provide information
with a reckless disregard for the facts if you make little or
no effort to determine whether the information provided is
accurate and your lack of effort to provide accurate infor-
mation is substantially different from what a reasonable
person would do under the circumstances.
Example. In November, Catelyn enrolled in a qualified
health plan for the following year and got APTC for her
coverage. The Marketplace determined that Catelyn was
ineligible for Medicaid and estimated that her household
income will be 140% of the federal poverty line for her
family size for purposes of determining APTC. During the
year, Catelyn lost her job and her household income for
2021 is 130% of the federal poverty line (within the Medic-
aid income threshold). For purposes of the PTC, Catelyn
is treated as ineligible for Medicaid for 2021. Catelyn may
be eligible for the PTC for the entire year.
Medicaid or CHIP eligibility when Marketplace does
not discontinue APTC. If a determination is made that
an individual who is enrolled in a qualified health plan for
which APTC is made is eligible for Medicaid or CHIP but
the Marketplace does not discontinue APTC for the first
calendar month beginning after the eligibility determina-
tion, the individual is treated as eligible for Medicaid or
CHIP no earlier than the first day of the second calendar
month beginning after the eligibility determination.
Employer-Sponsored Plans
The following employer-sponsored plans are MEC.
1. Group health insurance coverage for employees un-
der:
a. An insured plan or coverage offered in the small or
large group market within a state;
Page 10 Publication 974 (2021)
b. A governmental plan, such as the Federal Em-
ployees Health Benefits Program; or
c. A grandfathered health plan offered in a group
market.
2. A self-insured group health plan for employees.
3. Coverage under certain expatriate health plans for
employees (discussed earlier).
4. The Nonappropriated Fund Health Benefits Program
of the Department of Defense.
In general, these employer-sponsored plans may also
include retiree or COBRA coverage.
Employer-sponsored plans that are MEC are also refer-
red to as “eligible employer-sponsored plans.”
Exceptions. The following paragraphs discuss when em-
ployer-sponsored plans are not considered MEC and the
circumstances in which you may be eligible for the PTC
even if you have an offer of coverage under an em-
ployer-sponsored plan.
Excepted benefits. Employer-sponsored health cov-
erage that is limited to excepted benefits is not MEC. Ex-
cepted benefits include stand-alone vision and dental
plans, workers' compensation coverage, and coverage
limited to a specified disease or illness.
Affordability and minimum value. Even if you had
the opportunity to enroll in coverage offered by your em-
ployer that qualifies as MEC, you are considered eligible
for an employer-sponsored plan (and cannot get the PTC
for your coverage in a qualified health plan) only if the em-
ployer-sponsored coverage is affordable (defined later)
and the coverage provides minimum value (defined later).
Your tax family members may also be unable to get the
PTC for coverage in a qualified health plan for months
they were eligible to enroll in employer-sponsored cover-
age offered to them by your employer but only if the cover-
age qualifies as MEC and was affordable and provided
minimum value for you. In addition, if you or your family
member enrolls in the employer coverage that qualifies as
MEC, the individual enrolled cannot get the PTC for cover-
age in a qualified health plan, even if the employer cover-
age is not affordable or does not provide minimum value.
Waiting periods and other periods without access
to benefits. You are not considered eligible for employer
coverage, and can get the PTC for your coverage in a
qualified health plan if you are otherwise eligible, for a
month when you cannot receive benefits under the em-
ployer coverage (for example, you are in a waiting period
before the employer coverage becomes effective). How-
ever, if you could have enrolled in employer coverage that
is MEC and is affordable and provides minimum value
and you did not enroll during an enrollment period, you
cannot get the PTC for your coverage in a qualified health
plan for the remainder of the plan year to which the enroll-
ment period related. If the enrollment period related to
coverage for more than one plan year, and you do not
have another opportunity to enroll in the employer cover-
age for plan years following the initial plan year, you can
take the PTC for your coverage in a qualified health plan
during those later plan years, if you are otherwise eligible.
Coverage after employment ends. If your employ-
ment with an employer ends and you are offered employer
coverage by your former employer (for example, COBRA
or retiree coverage), you are considered eligible for that
employer coverage for PTC purposes only for the months
that you are enrolled in the employer coverage. This same
rule applies to an individual who may enroll in the cover-
age by reason of a relationship to a former employee.
Individual not in your tax family. An individual who
can enroll in your employer coverage who is not a mem-
ber of your tax family (for example, an adult non-depend-
ent child under age 26) is considered eligible for the em-
ployer coverage for PTC purposes only for the months the
individual is enrolled in the employer coverage.
How to determine if the plan is affordable. Your em-
ployer coverage is generally considered affordable for you
and for a family member if your share of the annual cost
for self-only coverage, which is sometimes referred to as
the “employee required contribution,” is not more than
9.83% of your tax family’s household income for 2021. For
2022, this threshold will decrease to 9.61%. Self-only cov-
erage is used for this calculation even if you have a
spouse or dependents and therefore would enroll in cov-
erage that is not self-only coverage (for example, family
coverage). However, employer-sponsored coverage is
not considered affordable if, when you or a family member
enrolled in a qualified health plan, you gave accurate in-
formation about the availability of employer coverage to
the Marketplace, and the Marketplace determined that
you were eligible for APTC for the individual’s coverage in
the qualified health plan. See Determining affordability at
the time of enrollment, later, for more information on this
rule.
Certain employer arrangements. An employee’s re-
quired contribution for employer-sponsored coverage may
be affected by various arrangements offered by the em-
ployer.
Wellness program incentives. If the employer that
offered you (or your spouse) employer-sponsored cover-
age for 2021 also offered a wellness incentive that poten-
tially affected the amount that you had to pay toward cov-
erage, the following rules apply: If the condition for
satisfying the wellness incentive (in other words, the con-
dition the employee must meet to pay the smaller amount
for coverage) relates exclusively to tobacco use, your re-
quired contribution is based on the amount you would
have paid for coverage if you had satisfied the condition
for the wellness incentive. Wellness incentives relating ex-
clusively to tobacco use are treated as satisfied in deter-
mining your required contribution regardless of whether
you would have actually earned the incentive had you en-
rolled in the coverage. If factors other than tobacco use
are part of the condition for satisfying the wellness incen-
tive, your required contribution is based on the amount
you would have paid for coverage had you not satisfied
the wellness incentive.
Publication 974 (2021) Page 11
Example. George can enroll in employer coverage.
George’s monthly premiums for self-only coverage are
$450. If George, who is a smoker, attends a smoking ces-
sation class, his monthly premiums will be reduced by
$100. If George completes a cholesterol screening, his
monthly premiums will be reduced by $50. Whether or not
George actually completes either of these wellness pro-
gram incentives, for purposes of determining whether the
coverage is affordable for George, his required contribu-
tion will be considered to be the amount reduced by the
$100 incentive for attending a smoking cessation class
but not reduced by the $50 incentive for completing a cho-
lesterol screening. Therefore, for purposes of determining
whether his coverage is considered affordable, George’s
required contribution is $350.
Health reimbursement arrangements (HRAs). If the
employer that offered you employer-sponsored coverage
for 2021 also contributed (or offered to contribute) to an
HRA that may be used to pay premiums for the em-
ployer-sponsored coverage, your required contribution for
the employer-sponsored coverage is reduced by the
amount the employer contributed (or offered to contribute)
to the HRA for 2021, as long as you were informed of the
HRA contribution offer by a reasonable time before you
had to decide whether to enroll in the coverage. Employ-
ers may offer you alternative or additional HRA coverage.
See Individual Coverage HRAs next.
Individual Coverage HRAs. Starting in 2020, em-
ployers can offer individual coverage HRAs to help em-
ployees and their families with their medical expenses.
Under an individual coverage HRA, employers can reim-
burse eligible employees for medical expenses, including
premiums for Marketplace health insurance.
If you were covered under an individual coverage HRA
for 2021, you are not allowed a PTC for your 2021 Market-
place health insurance. Also, if another member of your
tax family was covered under an individual coverage HRA
for 2021, you are not allowed a PTC for the family mem-
ber's 2021 Marketplace health insurance. If you or a family
member could have been covered by an individual cover-
age HRA for 2021, but you opted out of receiving reim-
bursements under the individual coverage HRA, you may
be allowed a PTC for your, and your family member's,
Marketplace health insurance if the individual coverage
HRA is considered unaffordable.
Qualified small employer health reimbursement
arrangements (QSEHRAs). If your employer provided
you with a QSEHRA, special rules apply. See Qualified
Small Employer Health Reimbursement Arrangement,
later, for more details.
Health flex contributions. If the employer that of-
fered you (or your spouse) employer-sponsored coverage
for 2021 also made (or offered to make) a health flex con-
tribution for 2021, your required contribution for the em-
ployer-sponsored coverage is reduced by the amount of
the health flex contribution (or offer). A health flex contri-
bution is an employer contribution to a cafeteria plan that
may be used only to pay for medical care (and not taken
as cash or other taxable benefits) and is available for use
toward the purchase of MEC. Cafeteria plan contributions
that may be used for expenses other than medical care
are not health flex contributions and so do not reduce your
required contribution.
Opt-out payments. If the employer that offered you
(or your spouse) employer-sponsored coverage for 2021
offered you an additional payment if you declined to enroll
in the coverage (an “opt-out payment”), your required con-
tribution for employer-sponsored coverage is increased
by amounts that the employer offered to pay you for de-
clining the coverage. In some cases, an employer may
make this opt-out payment only if the employee both de-
clines the coverage and also satisfies another condition
(such as enrolling in coverage offered by the employee's
spouse). If your employer imposed other conditions on re-
ceiving the opt-out payment (in addition to declining the
employer's health coverage), you may treat the opt-out
payment as increasing the employee's required contribu-
tion only if you can demonstrate that you met the condi-
tions (such as enrolling in coverage offered by your spou-
se's employer).
More information about employer arrangements.
You should contact your employer if you have questions
about the effect of the employer arrangements described
above on your required contribution.
If your employer or the employer of a family mem-
ber offered MEC providing minimum value and
provided you a Form 1095-C and the employer
also offered a non-health flex contribution or an opt-out
payment, the amount reported on line 15 of Form 1095-C
may not accurately reflect the amount of your required
contribution for purposes of the PTC. If you have ques-
tions about the amount reported on line 15, contact your
employer using the contact number provided on the Form
1095-C.
Determining affordability at the time of enrollment.
Your employer coverage is not considered affordable if,
when you enroll in a qualified health plan, the Marketplace
determines that your required contribution for employer
coverage will be more than 9.83% of what the Market-
place estimates will be your household income and there-
fore that you are eligible for APTC for coverage in the
qualified health plan. Eligibility for employer coverage in
this situation does not disqualify you from taking the PTC
when you file your tax return, even if your required contri-
bution for coverage was not more than 9.83% of the
household income on your return. However, you will be
treated as eligible for affordable employer coverage
based on the household income on your tax return if:
• You did not provide current information to the Market-
place relating to your household income and the re-
quired contribution for your employer coverage during
each annual re-enrollment period, or
• You provided incorrect information to the Marketplace
about your required contribution with intentional or
reckless disregard for the facts.CAUTION
!
Page 12 Publication 974 (2021)
You provide information with intentional disregard for
the facts if you know that the information provided is inac-
curate. You provide information with a reckless disregard
for the facts if you make little or no effort to determine
whether the information provided is accurate and your
lack of effort to provide accurate information is substan-
tially different from what a reasonable person would do
under the circumstances.
The employer coverage offered by the various employ-
ers in the following examples qualifies as MEC.
Example 1. Celia is single and has no dependents.
Her household income for 2021 was $47,000. Celia’s em-
ployer offered its employees a health insurance plan that
provided minimum value and for which the required contri-
bution was $3,450 for self-only coverage for 2021 (7.34%
of Celia’s household income). Because Celia’s required
contribution for self-only coverage did not exceed 9.83%
of household income, her employer’s plan is considered
affordable for Celia, and Celia is considered eligible for
the employer coverage for all months in 2021. Celia can-
not get the PTC for coverage in a qualified health plan.
Example 2. The facts are the same as in Example 1,
except that Celia is married to Jon and the employer’s
plan required Celia to contribute $5,300 for coverage for
Celia and Jon for 2021 (11.28% of Celia’s household in-
come). Because Celia’s required contribution for self-only
coverage ($3,450) does not exceed 9.83% of household
income, her employer’s plan is considered affordable for
Celia and Jon. Both Celia and Jon are considered eligible
for the employer coverage for all months in 2021 and can-
not get the PTC for coverage in a qualified health plan.
Example 3. Don was eligible to enroll in employer cov-
erage in 2021. Don’s required contribution for self-only
coverage that provided minimum value was $3,700. Don
applied for coverage in a qualified health plan through the
Marketplace. The Marketplace projected that Don’s 2021
household income would be $37,000 and determined that
Don’s employer coverage was unaffordable because
Don’s required contribution was more than 9.83% of
Don’s household income. Don enrolled in a qualified
health plan through the Marketplace with APTC and not in
the employer coverage. In December, Don received an
unexpected $2,500 bonus, which increased his 2021
household income to $39,500. Although Don’s required
contribution for the employer coverage was not more than
9.83% of the household income on Don’s tax return, Don
is considered not eligible for the employer coverage for
2021 because the Marketplace estimated that the em-
ployer coverage would cost more than 9.83% of Don’s
household income. Don can get the PTC if he otherwise
qualifies.
Example 4. Hal was eligible for employer coverage for
2021. His required contribution for self-only coverage was
$3,400, and Hal enrolled in the coverage. His household
income for 2021 was $33,000, which means that his re-
quired contribution was more than 9.83% of his household
income. Even though the employer coverage was not af-
fordable, Hal cannot get the PTC for coverage in a
qualified health plan because he enrolled in the employer
coverage.
Example 5. Elsa is married and has two dependent
children. Her household income for 2021 was $39,000. El-
sa’s employer offered only self-only coverage to employ-
ees. No family coverage was offered. The plan had a re-
quired contribution of $3,000 for self-only coverage for
2021 (7.69% of Elsa’s household income) and provided
minimum value. Because Elsa’s required contribution for
self-only coverage was not more than 9.83% of household
income, her employer’s plan is considered affordable for
Elsa. Thus, Elsa is considered eligible for the employer
coverage for 2021 and cannot get the PTC for coverage in
a qualified health plan. However, because Elsa’s em-
ployer did not offer coverage to Elsa’s spouse and chil-
dren, Elsa could take the PTC for her spouse and two chil-
dren if they enrolled in a qualified health plan and
otherwise qualify.
Example 6. The facts are the same as in Example 5,
except that Elsa’s employer also offers coverage to Elsa’s
spouse and children. The premiums for family coverage
cost $6,900 (17.69% of Elsa’s household income). Be-
cause the required contribution for self-only coverage was
not more than 9.83% of Elsa’s household income, the em-
ployer coverage is considered affordable for Elsa and her
family. Elsa cannot take the PTC for anyone in her family.
Determining affordability for part-year period. If
you are employed for part of a year or employed by differ-
ent employers during the year, you determine whether
your coverage is affordable by looking separately at each
coverage period that is less than a full calendar year. For
each period, the coverage is affordable if your required
contribution for the entire year would not be more than
9.83% of your household income for the year.
Example. Elvis was enrolled in a qualified health plan
without APTC beginning in January 2021. He began work-
ing for a new employer in May that offers health insurance
coverage with a calendar year plan year. Elvis’ required
contribution for the employer coverage for the remainder
of the year was $200/month, which would be $2,400 for
the full plan year. Elvis does not enroll in the employer
coverage or inform the Marketplace of the offer of em-
ployer coverage. Elvis’ household income for the year is
$20,000. Elvis’ employer coverage is considered unaf-
fordable for the period May through December because
his required contribution for the full plan year, $2,400, is
more than 9.83% of his household income. As a result, El-
vis could take the PTC for May through December if he
otherwise qualifies.
Coverage year not a calendar year. If your employ-
er’s plan year is not the calendar year and you are a cal-
endar year taxpayer, you determine whether your cover-
age is affordable by looking separately at the portion of
the calendar year in each plan year. A coverage period in
2021 that falls in a plan year beginning in 2020 is consid-
ered affordable if your required contribution for the entire
plan year is not more than 9.83% of your household in-
come for 2021. A coverage period in 2021 that falls in a
Publication 974 (2021) Page 13
plan year beginning in 2021 is considered affordable if
your required contribution for the entire plan year is not
more than 9.83% of your household income for 2021.
The employer coverage offered by the various employ-
ers in the following examples qualifies as MEC.
Example 1. Tim’s employer offers health insurance
coverage with a plan year of July 1 through June 30. His
required contribution for the plan year that began on July
1, 2020, was $250 per month ($3,000 for the entire plan
year). Tim enrolled in a qualified health plan on January 1,
2021, and did not apply for APTC. Tim’s household in-
come for 2021 is $30,000. Tim’s required contribution for
the plan year, $3,000, is 10% of his household income for
2021. Because 10% is more than 9.83% (the required
contribution percentage for the plan year beginning in
2020), Tim’s employer coverage for January 1, 2021,
through June 30, 2021, is not considered affordable, and
Tim can take the PTC for those months if he is otherwise
eligible.
For the plan year that began on July 1, 2021, Tim’s re-
quired contribution was reduced to $200 per month (or
$2,400 for the entire plan year). Tim’s required contribu-
tion of $2,400 is 8% of his 2021 household income. Be-
cause 8% is not more than 9.83% (the required contribu-
tion percentage for the plan year beginning in 2021), Tim’s
employer coverage for July 1, 2021, through December
31, 2021, is considered affordable and he is not eligible
for the PTC for those months.
Example 2. Maria’s employer offers health insurance
coverage with a plan year of September 1 through August
31. Maria’s required contribution for the employer cover-
age for the plan year September 1, 2021, through August
31, 2022, is $3,700. Maria’s household income for 2021 is
$37,000. Maria’s employer coverage is considered unaf-
fordable for the period September 1 through December
31, 2021, because her required contribution for the plan
year, $3,700, is more than 9.83% of her 2021 household
income. If Maria enrolls in a qualified health plan for 2022
and requests APTC, the Marketplace will determine
whether the employer coverage is considered affordable
for the period January 1, 2022, through August 31, 2022,
by comparing Maria’s required contribution for the plan
year beginning in 2021, $3,700, to her estimated 2022
household income.
How to determine if a plan provides minimum value.
An employer-sponsored plan provides minimum value
only if the plan pays at least 60% of the total allowed costs
of benefits for a standard population and provides sub-
stantial coverage of inpatient hospitalization services and
physician services. A plan meets the 60% rule only if an
employee’s expected cost-sharing (deductibles, co-pays,
and co-insurance) under the plan is no more than 40% of
the cost of the benefits. This percentage is based on ac-
tuarial principles using benefits provided to a standard
population and is not based on what you actually pay for
cost sharing.
Your employer must provide you with a summary of
benefits and coverage (SBC) on or before the first day of
the open enrollment period for the plan you are enrolled in
for the current coverage period. The employer must also
provide you with SBCs you request for other plans in
which you can enroll. If you are not enrolled in a plan, the
employer must provide you with the SBCs for all plans in
which you can enroll. The SBC will tell you whether an
employer-sponsored plan provides minimum value. If your
employer sent you a Form 1095-C, line 14 of that form will
include an indicator code telling you if your employer of-
fered you a health plan in the previous year that provided
minimum value.
Qualified Small Employer Health
Reimbursement Arrangement
(QSEHRA)
Under a QSEHRA, an eligible employer can reimburse eli-
gible employees for medical expenses, including premi-
ums for a qualified health plan purchased through the
Marketplace. An eligible employer is one that, in general,
employs fewer than 50 full-time employees and does not
offer a group health plan.
A QSEHRA is an arrangement that meets all the follow-
ing requirements.
1. The arrangement is funded solely by the employer,
and no salary reduction contributions may be made
under the arrangement.
2. The arrangement provides, after the eligible em-
ployee provides proof of coverage, for the payment or
reimbursement of the medical expenses incurred by
the employee or the employee's family members.
3. The amount of payments and reimbursements don't
exceed $5,300 ($10,700 for family coverage) for
2021.
4. The arrangement is generally provided on the same
terms to all eligible employees. However, the employ-
er's QSEHRA may exclude employees who haven't
completed 90 days of service, employees who
haven't attained age 25 before the beginning of the
plan year, part-time or seasonal employees, employ-
ees covered by a collective bargaining agreement if
health benefits were the subject of good-faith bargain-
ing, and employees who are nonresident aliens with
no earned income from sources within the United
States.
If you are provided a QSEHRA, and it is considered af-
fordable coverage for a month, no PTC is allowed for that
month. If the QSEHRA is not considered affordable cover-
age for 1 or more months, you may still be eligible for the
PTC. If you are eligible for the PTC for any month for
which you are provided a QSEHRA, you must reduce your
PTC (but not below -0-) for that month by the monthly
QSEHRA permitted benefit amount. The monthly permit-
ted benefit amount is the maximum QSEHRA benefit
amount an eligible employee is allowed per month. See
Permitted benefit reported on Form W-2, later, and Work-
sheet Q for more information.
Page 14 Publication 974 (2021)
Written notice of QSEHRA. If you were provided a
QSEHRA during 2021, your employer should have provi-
ded written notice to you by the later of October 3, 2020,
or 90 days before the first day of the plan year of the
QSEHRA, or if you're an employee who is not eligible to
participate at the beginning of the year, the date on which
you're first eligible to participate in the QSEHRA. The in-
formation in this notice is necessary to determine how the
QSEHRA affects your PTC. The permitted benefit for
self-only coverage as reported by the employer in the
written notice is used to determine whether the QSEHRA
is considered affordable coverage, regardless of whether
the permitted benefit provided to you is for self-only or
family coverage. If the notice provided to you does not in-
clude a permitted benefit amount for self-only coverage,
you must contact your employer to get that information.
Use Worksheet N to determine whether your QSEHRA is
considered affordable coverage for the months of the year
that you were provided the QSEHRA. You will need the
notice provided by your employer and the permitted bene-
fit for self-only coverage to complete Worksheet N.
Permitted benefit reported on Form W-2. Your em-
ployer should have reported your annual permitted benefit
(self-only or family amount, as applicable) in box 12 of
your Form W-2 with code FF. Your permitted benefit
amount, as reported to you by your employer on Form
W-2, is used to calculate the amount by which you must
reduce your PTC, if you are otherwise eligible for the PTC.
Use Worksheet Q to figure your monthly PTC for months
in which you were provided a QSEHRA.
APTC for 2021 and 2022. If APTC was paid for your
2021 Marketplace coverage, your QSEHRA permitted
benefit for 2021 was not considered by the Marketplace in
calculating the amount of your 2021 APTC. Furthermore,
if you requested APTC for your 2022 Marketplace cover-
age, the Marketplace did not consider your 2022 permit-
ted benefit in calculating the amount of your 2022 APTC. If
you are provided a QSEHRA for 2022, you should contact
the Marketplace and ask the Marketplace to reduce the
amount of APTC to be paid on your behalf for 2022 to limit
the risk of having excess APTC for 2022.
Publication 974 (2021) Page 15
Worksheet N. Worksheet To Determine if the QSEHRA Is
Considered Affordable Keep for Your Records
Note. See Special instructions for Worksheet N if your SLCSP premium was not the same for all months of 2021 or you
changed employers during 2021.
1. Enter the amount from Form 8962, line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Multiply line 1 by 0.0983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter the number of months you were provided the QSEHRA in 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Divide line 2 by 12.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. If you enrolled in a qualified health plan, enter the monthly premium you would pay for self-only coverage under
the second lowest cost silver plan (SLCSP) offered by the Marketplace where you enrolled in coverage. If you did
not enroll in a qualified health plan, enter the monthly premium that the oldest member of your coverage family
who is enrolled in a qualified health plan would pay for self-only coverage under the SLCSP offered by the
Marketplace where that family member enrolled. See Applicable SLCSP premium tools, later, to learn how to
retrieve the applicable SLCSP premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter the self-only coverage permitted benefit from the written notice provided by your employer. If you were
provided the QSEHRA for less than 12 months in 2021, see Part-year coverage, later, for what amount to enter
on line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Divide line 6 by line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Subtract line 7 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Compare lines 4 and 8.
• If line 4 is less than line 8, the QSEHRA is not considered affordable. Stop here. Complete Worksheet Q.
• If line 4 is greater than or equal to line 8, the QSEHRA is considered affordable. Skip Worksheet Q. Stop
here and do not file Form 8962 if you were provided a QSEHRA for every month you were covered by a
qualified health plan and no APTC was paid for you or another individual in your tax family. Otherwise, write
"QSEHRA" in the top margin of Form 8962. If you are completing Form 8962, lines 12 through 23, stop here
and enter -0- on lines 12(e) through 23(e) for each month you were provided the QSEHRA. If you are
completing Form 8962, line 11, and you were provided the QSEHRA for all of 2021, stop here and enter -0-
on line 11(e). If you were not provided the QSEHRA for all of 2021, complete lines 10 through 13 below.
10. Enter the smaller of Form 8962, line 11(a) or 11(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Divide line 10 by 12.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Multiply line 11 by line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Subtract line 12 from line 10. Enter the result here and on Form 8962, line 11(e) . . . . . . . . . . . . . . . . . . . . . . . . . 13.
Page 16 Publication 974 (2021)
Special instructions for Worksheet N if you did not
have the same SLCSP for all months of 2021 or
changed employers during 2021. You must complete
a separate worksheet through line 8 for each part of the
year in which you had a different SLCSP premium for
self-only coverage while provided a QSEHRA, or you
were provided a QSEHRA from different employers with
different self-only permitted benefits. For example, Bob
was employed for all of 2021 by an employer that provides
a QSEHRA to its employees. Bob changed Marketplace
policies in May of 2021 because of a change in residence.
As a result, Bob’s SLCSP premium for self-only coverage
was different for the period January through May than for
the period June through December. To determine the af-
fordability of the QSEHRA provided to Bob, Bob must
complete a separate Worksheet N for the period January
through May and the period June through December.
Once you have completed the separate worksheets
through line 8, read the following.
• If the Worksheets N show that the QSEHRA is unaf-
fordable for at least 1 month (line 4 is less than line 8
in at least one of the worksheets), skip lines 9 through
13 and complete Worksheet Q.
• If the Worksheets N show that the QSEHRA is afford-
able for all months of 2021 (line 4 is greater than or
equal to line 8 in all the worksheets), follow the in-
structions on line 9 of the worksheet relating to “If
line 4 is greater than or equal to line 8.” Complete lines
10 through 13 if you are instructed to do so.
Part-year coverage—Instruction for line 6. If you were
provided a QSEHRA for less than 12 months in 2021, the
written notice your employer sent to you may have provi-
ded the self-only coverage permitted benefit for only the
months you were provided the QSEHRA or the self-only
coverage permitted benefit for the entire year (if the notice
provided to you does not include a permitted benefit
amount for self-only coverage, you must contact your em-
ployer to get that information). If the notice provided the
permitted benefit amount just for the months you were
provided the QSEHRA, then enter that amount on line 6. If
the notice provided the self-only coverage permitted ben-
efit for the entire year, figure the amount to enter on line 6
as follows.
1. Divide the self-only coverage permitted benefit for the
entire year by 12.0.
2. Multiply the result by the number of months you were
provided the QSEHRA.
Instructions for Worksheet Q, Part III
Column A. If you completed Form 8962, lines 12 through
23, enter the smaller of column (a) or (d) on the lines in
Part III for the months you were provided a QSEHRA. If
you completed Form 8962, line 11, and were instructed to
complete Part III in the second bullet under Before you be-
gin, divide the amount on line 11(a) by 12.0. Then, divide
the amount on line 11(d) by 12.0. Enter the smaller of the
2 amounts on each line in column A for the months you
were provided a QSEHRA.
Column B. The amount you enter in column B depends
on whether the QSEHRA is considered affordable cover-
age for the month. For the months the QSEHRA is consid-
ered affordable coverage, enter in column B the amount
you entered in column A. For the months the QSEHRA is
not considered affordable coverage, complete column B
as follows.
• If you completed Part I, enter the amount from line 3
on the lines for the months you completed column A.
• If you skipped Part I, enter the monthly permitted ben-
efit amount (the amount from Form W-2, box 12, code
FF, divided by the number of months you were provi-
ded the QSEHRA) on the lines for the months you
completed column A.
To determine whether the QSEHRA is considered af-
fordable coverage for any month, see Worksheet N.
Self-only permitted benefit for some months and
family permitted benefit for others. Your permitted
benefit is reported in box 12 of Form W-2 using code FF.
However, if you received a self-only permitted benefit for
part of the year and a family permitted benefit for another
part of the year, the amount reported on your Form W-2
reflects that change. For purposes of this worksheet, di-
vide the self-only permitted benefit as described in the
written notice from your employer by 12.0 to determine
your column B monthly permitted benefit for the months in
which you were provided a permitted benefit for self-only
coverage. Divide the family permitted benefit as described
in the written notice from your employer by 12.0 to deter-
mine your column B monthly permitted benefit for the
months in which you were provided a permitted benefit for
family coverage. If you were provided the QSEHRA for
less than 12 months in 2021, see Part-year coverage for
taxpayers with changes in permitted benefits next for what
amount to enter on line 6 of Worksheet N.
Part-year coverage for taxpayers with changes in
permitted benefits. If you received a self-only permitted
benefit for part of the year and a family permitted benefit
for another part of the year and you were provided a
QSEHRA for less than 12 months in 2021, you should
consult the written notice your employer sent to you to de-
termine the amount to put in column B. The notice your
employer sent to you may have included the permitted
benefit for only the months you were provided the
QSEHRA or the permitted benefit for the entire year. If the
notice provided the permitted benefit for the entire year,
divide the self-only coverage permitted benefit for the en-
tire year by 12.0 and enter that amount in column B for the
months you received a self-only permitted benefit. Then,
divide the family coverage permitted benefit for the entire
year by 12.0 and enter that amount in column B for the
months you received a family permitted benefit. If the no-
tice provided the permitted benefit for only the months you
were provided the QSEHRA, divide that amount by the
Publication 974 (2021) Page 17
Worksheet Q. Worksheet To Figure Monthly Credit Amount
if You Have a QSEHRA Keep for Your Records
Before you begin:
• See Worksheet N to determine whether the QSEHRA is considered affordable coverage for any month. If the QSEHRA is considered
affordable coverage for some months but not others, see the instructions for column B below for the amount you enter in column B for the
affordable months.
• If the monthly permitted benefit was the same for each month you were provided the QSEHRA and the QSEHRA was not considered
affordable for all of those months, go to Part I. If the monthly permitted benefit was not the same for each month you were provided the
QSEHRA or the QSEHRA was considered affordable for some but not all the months it was provided, go to Part III. Skip Parts I and II.
Caution. If you received a self-only permitted benefit for part of the year and a family permitted benefit for another part of the year, you must
complete Part III even though the amount reported on your Form W-2 reflects this change.
Part I: Monthly Permitted Benefit
1. Enter the amount from Form W-2, box 12, code FF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the number of months you were provided the QSEHRA in 2021 . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Divide line 1 by line 2. Then, do one of the following . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
• If you are completing Form 8962, line 11, go to Part II below.
• If you are completing Form 8962, lines 12 through 23, go to Part III below. Skip Part II.
Part II: Annual Calculation
4. Enter the smaller of Form 8962, line 11(a) or line 11(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Divide line 4 by 12.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter the smaller of line 3 or line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Multiply line 6 by line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Subtract line 7 from line 4. Enter the result here and on Form 8962, line 11(e). Write “QSEHRA” in the top
margin of Form 8962. Skip Part III below . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
Note. If the result is -0- and the amount you will enter on line 11(f) is also -0-, stop here. Do not file Form
8962.
Part III: Monthly Calculation
Month A. Tentative monthly premium tax credit
(see instructions) B. Monthly permitted benefit (see
instructions) C. Subtract col. B from col. A. If less
than zero, enter -0-.
9. January
10. February
11. March
12. April
13. May
14. June
15. July
16. August
17. September
18. October
19. November
20. December
21. If you are completing Form 8962, lines 12 through 23, stop here and enter the amounts from column C in
column (e) for the months you completed column A. Write “QSEHRA” in the top margin of Form 8962.
Note. If all entries in columns (e) and (f) are -0- or blank, do not file Form 8962.
22. If you are completing Form 8962, line 11, add the amounts in column C above and enter the result here. If
line 22 is -0- and no APTC was paid for you or another individual in your tax family, stop here and do not
file Form 8962. Otherwise, do one of the following . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.
• If you were provided the QSEHRA for all of 2021, stop here and also enter the result on Form 8962,
line 11(e). Write “QSEHRA” in the top margin of Form 8962.
• If you were not provided the QSEHRA for all of 2021, complete lines 23 through 27 below to figure
the amount to enter on Form 8962, line 11(e).
23. Enter the smaller of Form 8962, line 11(a) or 11(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.
24. Divide line 23 by 12.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.
25. Multiply line 24 by the number of months you were provided the QSEHRA in 2021 . . . . . . . . . . . . . . . . 25.
26. Subtract line 25 from line 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.
27. Add lines 22 and 26. Enter the result here and on Form 8962, line 11(e). Write “QSEHRA” in the top
margin of Form 8962 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.
Page 18 Publication 974 (2021)
number of months you were provided that permitted bene-
fit under the QSEHRA and enter the amount in column B
for the appropriate months.
Grandfathered Health Plan
A grandfathered health plan means any group health plan,
group health insurance coverage, or individual health in-
surance coverage to which section 1251 of the Affordable
Care Act applies (in general, certain group health plans
and health insurance coverage existing as of March 23,
2010, for as long as the coverage maintains that status
under the applicable rules). Health plans must disclose if
they are grandfathered. For more information about
grandfathered health plans, see HealthCare.gov/Health-
Care-Law-Protections/Grandfathered-Plans/.
Other Coverage Designated by the
Department of Health and Human
Services (HHS)
The HHS has designated the following health benefit
plans or arrangements as MEC.
1. Employer coverage provided to business owners who
are not employees.
2. Coverage under a group health plan provided through
insurance regulated by a foreign government if:
a. A covered individual is physically absent from the
United States for at least 1 day during the month,
or
b. A covered individual is physically present in the
United States for a full month and the coverage
provides health benefits within the United States
while the individual is on expatriate status.
3. Coverage of pregnancy-related services that consists
of full Medicaid benefits.
4. Other specific programs listed at CMS.gov/CCIIO/
Programs-and-Initiatives/Health-Insurance-Market-
Reforms/Minimum-Essential-Coverage.html (click on
the link for “Approved Plans”). These programs in-
clude certain:
a. Self-insured university student health plans; and
b. Coverage resembling coverage under a state’s
CHIP program that generally requires the payment
of premiums with little or no government subsidy,
often called CHIP buy-in programs.
In general, if you were eligible for coverage that HHS has
designated as MEC, you are not eligible to claim the PTC
for coverage through the Marketplace. However, you are
considered as eligible for MEC under a self-insured uni-
versity student health plan or a CHIP buy-in program that
has been designated as MEC only if you are enrolled in
the coverage.
Individuals Not Lawfully
Present in the United States
Enrolled in a Qualified Health
Plan
The PTC is not allowed for the coverage of an individual
who is not lawfully present in the United States. All APTC
paid for an individual not lawfully present who enrolls in a
qualified health plan must be figured. If all family members
enrolled in a qualified health plan are not lawfully present,
see the discussion immediately below. If you or a member
of your family is not lawfully present and was enrolled in a
qualified health plan with family members who are lawfully
present for 1 or more months of the year, you must use
the instructions under Lawfully Present and Not Lawfully
Present Family Members Enrolled, later, to find out how
much APTC, if any, was allowable.
For more information about who is treated as law-
fully present for this purpose, visit
HealthCare.gov/Immigrants/Immigration-Status/.
All Enrolled Family Members Not
Lawfully Present
If all family members enrolled in a qualified health plan are
not lawfully present, no PTC is allowed. Complete lines on
Form 8962 as explained below. Leave all other lines
blank.
Lines 1, 2a, 3, 4, and 5. Enter -0-.
Line 9. Complete line 9 as provided in the Form 8962 in-
structions to determine whether you must complete Part
IV for an allocation of policy amounts. Complete Part IV if
instructed to do so by Table 3 in the Form 8962 instruc-
tions. Do not complete Part V.
Line 11(f) (or lines 12 through 23, column (f), if you
complete Part IV). If you checked the “No” box on line 9,
enter the total of your Form(s) 1095-A, Part III, line 33C,
on line 11(f). If you checked the “Yes” box on line 9, com-
plete lines 12 through 23, column (f), as provided in the
Form 8962 instructions.
Line 24. Enter -0-.
Lines 25, 27, and 29. Enter the amount from line 11(f)
(or the total of lines 12 through 23, column (f)) on each
line. Then, follow the instructions for line 29.TIP
Publication 974 (2021) Page 19
Lawfully Present and Not Lawfully
Present Family Members Enrolled
Before you read the following discussion, first fa-
miliarize yourself with the definitions of tax family
and coverage family discussed under Terms You
May Need To Know, earlier.
If you or a member of your family is not lawfully present
and was enrolled in a qualified health plan with family
members who are lawfully present for 1 or more months of
the year, you may take the PTC only for the coverage of
the lawfully present family members. You must determine
how much APTC was paid for the coverage of a not law-
fully present family member. Complete Form 8962 using
the following steps.
Step 1. Complete Part I according to the instructions. If
you are not eligible for the PTC, skip the rest of these
steps, complete Form 8962 through line 27, and then see
How To Determine the Excess APTC That Must Be Re-
paid, later.
Step 2. Determine your monthly enrollment premiums
and applicable SLCSP premium using the instructions un-
der How To Determine Your Monthly Enrollment Premi-
ums and SLCSP Premium, later.
Step 3. Complete line 9, including Parts IV and V if in-
structed to do so.
Step 4. If Situation 1 (discussed later) applies to you, do
one of the following.
• If the enrolled lawfully present family members are en-
rolled for all 12 months of 2021, check the “Yes” box
on line 10 and complete line 11, and lines 24 through
29, as appropriate.
• If the enrolled lawfully present family members are en-
rolled for less than 12 months, check the “No” box on
line 10, skip line 11, and complete lines 12 through 29,
as appropriate.
If Situation 2 (discussed later) applies to you, check the
“No” box on line 10, skip line 11, and complete lines 12
through 25. Then, do one of the following.
• If line 24 is less than line 25, you have excess APTC.
See How To Determine the Excess APTC That Must
Be Repaid, later.
• If line 24 is equal to or greater than line 25, complete
line 26 as instructed. (Do not follow the instructions
under How To Determine the Excess APTC, later.)
How To Determine Your Monthly Enrollment
Premiums and Applicable SLCSP Premium
See Situation 1 or Situation 2 next for how to determine
your monthly enrollment premium and applicable SLCSP
premium.
Situation 1—Not lawfully present family members en-
rolled and no other changes in enrollment or cover-TIP
age family. Situation 1 applies if you have family mem-
bers who are not lawfully present that are enrolled for all
or a part of the year, there are no changes in your cover-
age family during the year (counting only lawfully present
family members), and there are no enrollment changes in-
volving your lawfully present family members enrolled in
the coverage during the year. If Situation 1 applies, you
should enter on Form 8962 for every month of the year the
enrollment premiums and applicable SLCSP premium the
Marketplace reports on Form 1095-A for the months when
only lawfully present individuals were enrolled in the cov-
erage. If a not lawfully present family member was enrol-
led for the entire year, see No reference month, later.
Example 1. Andrew enrolls himself and his three de-
pendents, Terri, Phil, and Anne in a qualified health plan.
Anne is not lawfully present in the United States. The
monthly enrollment premiums for the plan are $1,000. No
one in Andrew’s family is eligible for MEC (other than Mar-
ketplace coverage) and the applicable SLCSP premium
that would apply to all four members of Andrew’s family is
$1,200. There are no changes involving the lawfully
present members of the coverage family during the year.
Anne is disenrolled from coverage as of April 1. The
monthly enrollment premiums for Andrew and his other
two dependents are $800 and the applicable SLCSP pre-
mium that applies to Andrew’s coverage family of three is
$900. The Marketplace reports the following amounts on
Form 1095-A, Part III.
Months Column A Column B
January, February, March . . . . . . $1,000 $1,200
April through December . . . . . . . . $800 $900
When completing Form 8962, Andrew enters $9,600
($800 x 12) as the enrollment premiums on line 11, col-
umn (a), and $10,800 ($900 x 12) as the premium for the
applicable SLCSP on line 11, column (b).
Situation 2—Changes in enrollment or coverage fam-
ily involving a lawfully present family member. Situa-
tion 2 applies if you have family members who are not
lawfully present that are enrolled for all or part of the year,
and there are either changes in your coverage family dur-
ing the year (counting only lawfully present family mem-
bers) or enrollment changes involving your lawfully
present family members enrolled in the coverage during
the year. If Situation 2 applies, use these rules to deter-
mine the enrollment premiums and the applicable SLCSP
premium for the months any not lawfully present family
members are enrolled. First, use Worksheet A to deter-
mine if you have a reference month for enrollment premi-
ums or for the applicable SLCSP premium. You may have
a reference month for enrollment premiums (discussed
next) or a reference month for the applicable SLCSP pre-
mium (discussed later), or for both.
Reference month for enrollment premiums. A ref-
erence month for enrollment premiums is a month in
which the not lawfully present family member is not enrol-
led in coverage and there are no other changes in the
members of your family who are enrolled in the coverage.
Page 20 Publication 974 (2021)
In other words, your enrolled family members are the
same during the reference month as for a month the not
lawfully present member was enrolled, except that the not
lawfully present family member is not enrolled. Enter on
Form 8962, Part II, column (a), the enrollment premiums
for the reference month as the enrollment premiums for
the months the not lawfully present family member was
enrolled.
Reference month for SLCSP premium. A reference
month for the applicable SLCSP premium is a month in
which the not lawfully present family member is not enrol-
led in coverage and there are no other changes in your
coverage family. In other words, your coverage family is
the same during the reference month as for a month the
not lawfully present family member was enrolled, except
the not lawfully present family member is not included in
your coverage family. Enter on Form 8962, Part II, column
(b), the applicable SLCSP premium for the reference
month as the applicable SLCSP premium for the months
the not lawfully present family member was enrolled.
No reference month. If you do not have a reference
month for enrollment premiums, you may have to contact
your insurance company to find out what the amount of
the enrollment premiums would have been if the policy
had covered only lawfully present family members. If you
do not have a reference month for the applicable SLCSP
premium, you must look up the SLCSP premium that ap-
plies to your coverage family (without any not lawfully
present family members). See Determining the Premium
for the Applicable Second Lowest Cost Silver Plan
(SLCSP), later.
You may use Worksheet A to determine whether
you have any reference months.
Example 2. The facts are the same as in Example 1,
earlier, except that Andrew becomes eligible for em-
ployer-sponsored coverage on September 1, notifies the
Marketplace, but remains enrolled in the qualified health
plan (although he cannot take the PTC for his coverage
for the months after August). The applicable SLCSP pre-
mium that applies to Terri and Phil is only $400. The Mar-
ketplace reports the following amounts on Form 1095-A,
Part III.
Months Column A Column B
January, February, March . . . . . . $1,000 $1,200
April through August . . . . . . . . . . $800 $900
September through December . . . $800 $400
Andrew must complete lines 12 through 23 on Form
8962. April through August are reference months for bothTIP
enrollment premiums and the applicable SLCSP premium
for January through March (the months Anne was enrolled
in coverage) because Andrew’s coverage family and en-
rolled family members for April through August (Andrew,
Phil, and Terri) are the same as for January through
March except for Anne who is not lawfully present. (Sep-
tember through December are also reference months for
enrollment premiums.) The enrollment premiums and
SLCSP premium for April through August are the same
amounts they would have been for January through March
without Anne. Therefore, for the months January through
March, Andrew enters on Form 8962, lines 12 through 23,
$800 (the enrollment premiums for April through August)
in column (a) and $900 (the SLCSP premium that applies
to the coverage family for April through August) in column
(b).
Example 3. The facts are the same as in Example 1,
earlier, except that Andrew becomes eligible for em-
ployer-sponsored coverage on April 1, notifies the Market-
place, but remains enrolled in the qualified health plan.
The Marketplace reports the following amounts on Form
1095-A, Part III.
Months Column A Column B
January, February, March . . . . . . $1,000 $1,200
April through December . . . . . . . . $800 $400
Andrew does not have a reference month for the appli-
cable SLCSP premium for the months Anne was enrolled
in the qualified health plan because there is another
change in his coverage family for the months April through
December (Andrew is not in the coverage family because
he is eligible for employer-sponsored coverage). Thus,
there are no months when Andrew’s coverage family is
the same (except for Anne) before and after Anne is dis-
enrolled from coverage. Andrew must look up the SLCSP
premium that applies to his coverage family without Anne.
Andrew determines that the correct applicable SLCSP
premium to enter on Form 8962 for the months January
through March for a coverage family consisting of Andrew,
Terri, and Phil is $900.
April through December are reference months for An-
drew for enrollment premiums because the family mem-
bers who are enrolled for those months are the same fam-
ily members who were enrolled in January through March,
except for Anne.
Therefore, for the months January through March, An-
drew enters on Form 8962, lines 12 through 23, $800 (the
enrollment premiums for April through December) in col-
umn (a) and $900 (the SLCSP premium that would apply
to the coverage family of Andrew, Terri, and Phil) in col-
umn (b).
Publication 974 (2021) Page 21
How To Determine the Excess APTC That
Must Be Repaid
The excess APTC (see the instructions for Form 8962,
line 28) applies only to excess APTC for coverage of law-
fully present individuals. Excess APTC that relates to the
coverage of individuals who are not lawfully present must
be figured without limitation. Use Worksheet B to deter-
mine the amount of excess APTC if all of the following ap-
ply.
• You or a member of your family is not lawfully present
and is enrolled in a qualified health plan with family
members who are lawfully present for one or more
months of the year.
• You have excess APTC on line 27 of Form 8962.
• Your excess APTC on line 27 of Form 8962 is more
than your amount from Table 5 in the Form 8962 in-
structions.
If line 27 is not more than your amount from Table 5 in
the Form 8962 instructions, do not complete Worksheet
B. Leave line 28 of Form 8962 blank, enter the amount
from line 27 on line 29, and follow the instructions for
Worksheet A. Do You Have Any Reference Months? Keep for Your Records
Use this worksheet to determine whether you have any reference months.
Months in 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
1. Check a box for each month in which any
family members not lawfully present were
enrolled in coverage . . . . . . . . . . . . . . . . . . . .
2. Check a box for each month in which:
• Only lawfully present family members
were enrolled in coverage; and
• There were no other changes in
members of your tax family* who are
enrolled in coverage, as compared to a
month for which you checked a box on
line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The months for which you checked boxes
on line 2 are your reference months for
enrollment premiums. Use the enrollment
premium reported on Form 1095-A, Part III,
column A, for the reference month as your
enrollment premium on Form 8962 for the
month(s) you checked on line 1.
Note. If you did not check any boxes on this
line, see No reference month, earlier.
3. Check a box for each month in which:
• Only lawfully present family members
were enrolled in coverage; and
• There were no other changes in your
coverage family,* as compared to a
month for which you checked a box on
line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The months for which you checked boxes
on line 3 are your reference months for the
applicable SLCSP premium. Use the
applicable SLCSP premium reported on
Form 1095-A, Part III, column B, for the
reference month as your applicable SLCSP
premium on Form 8962 for the month(s) you
checked on line 1.
Note. If you did not check any boxes on this
line, see No reference month, earlier.
* See Terms You May Need To Know, earlier, for the definitions of tax family and coverage family.
Page 22 Publication 974 (2021)
line 29. If you must complete Worksheet B, see the illus-
trated example.
Illustrated Example of Determining the
Excess APTC That Must Be Repaid
Andrew enrolls himself and his three dependents, Terri,
Phil, and Anne in a qualified health plan. Anne is not law-
fully present in the United States and is disenrolled from
the coverage as of April 1. Andrew becomes eligible for
employer-sponsored coverage on September 1, notifies
the Marketplace, but remains enrolled in the qualified
health plan. The Marketplace reports the following
amounts on Form 1095-A, Part III.
Months Column A Column B Column C
January, February,
March . . . . . . . . . . . . $1,000 $1,200 $953
April through
August . . . . . . . . . . . . $800 $900 $653
September through
December . . . . . . . . . $800 $400 $153
Step 1. Andrew completes Part I of Form 8962 (not illus-
trated). His household income for the year on his Form
8962, line 3, is $72,050, which is 275% of the federal pov-
erty line. The annual contribution amount Andrew enters
on line 8a is $3,603 and the monthly contribution amount
he enters on line 8b is $300.
Step 2. Andrew determines his monthly enrollment pre-
miums and applicable SLCSP premium using the instruc-
tions under How To Determine Your Monthly Premium
and Applicable SLCSP Premium, earlier. Situation 2 in
that discussion applies to Andrew because he has a law-
fully present family member enrolled in coverage and
there are changes in his coverage family in 2021, counting
only lawfully present family members: beginning in Sep-
tember, only Phil and Terri are in the coverage family. An-
drew is no longer in the coverage family because he be-
comes eligible for employer-sponsored coverage.
Andrew completes Worksheet A as explained below to
determine his reference months for the enrollment premi-
ums and the applicable SLCSP premium for the months
Anne was enrolled. (Andrew’s Worksheet A is shown
later.)
Line 1. He checks the boxes for January, February,
and March because those are the months in which Anne
is enrolled in Marketplace coverage.
Line 2. He checks the boxes for April through Decem-
ber. Those months are reference months for enrollment
premiums ($800) for January through March because his
tax family for these months (Andrew, Phil, and Terri) is the
same as for January through March except for Anne.
Line 3. He checks the boxes for April through August.
These months are reference months for the applicable
SLCSP premium ($900) for January through March
because Andrew’s coverage family for these months (An-
drew, Phil, and Terri) is the same as for January through
March except for Anne. September through December
are not reference months for the applicable SLCSP pre-
mium (and Andrew doesn’t check these boxes) because,
as explained above, there was another change in his cov-
erage family beginning in September.
Step 3. Andrew checks the “No” box on line 9 because
he is neither allocating policy amounts with another tax-
payer nor using the alternative calculation for year of mar-
riage.
Step 4. Because Situation 2 (discussed earlier) applies to
Andrew, he checks the “No” box on line 10, skips line 11,
and completes lines 12 through 25. On lines 12 through
14, column (a), he enters $800 as determined in Work-
sheet A, line 2. On lines 12 through 14, column (b), he en-
ters $900 as determined in Worksheet A, line 3.
Andrew’s PTC on line 24 ($4,800) is less than his
APTC on line 25 ($6,736), and his excess APTC on
line 27 ($1,936) is greater than his Table 5 repayment limi-
tation amount ($1,600) in the Form 8962 instructions. Ac-
cording to the instructions under How To Determine the
Excess APTC That Must Be Repaid, earlier, Andrew must
complete Worksheet B to figure the amount of excess
APTC.
Andrew completes Worksheet B as follows.
Line 1. Andrew enters $953. This is the monthly APTC
shown on Form 1095-A, Part III, column C, for January,
February, and March (the months that Anne was enrolled
in coverage).
Line 2. Andrew enters $600. This is the amount from
Form 8962, Part II, column (e), for January through March
and represents the applicable monthly SLCSP premium
for April through August (reference months for the applica-
ble SLCSP premium) for Andrew, Terri, and Phil of $900
minus the monthly contribution amount of $300 from Form
8962, line 8b.
Line 4. Andrew enters $1,000. This is the monthly pre-
mium for January through March shown on Form 1095-A,
Part III, column A.
Line 5. Andrew enters $1,200. This is the applicable
SLCSP premium shown on Form 1095-A, Part III, column
B.
Line 6. Andrew enters $300. This is the monthly contri-
bution amount from Form 8962, line 8b.
Lines 7 through 14. Andrew completes these lines as
instructed on Worksheet B.
Line 15. Line 14 is more than line 13. Accordingly, An-
drew enters the amount from line 13 ($1,600) on Form
8962, lines 28 and 29.
Publication 974 (2021) Page 23
Worksheet B. Excess APTC That Must Be Repaid Keep for Your Records
Complete columns only for the months a not lawfully present family member was enrolled in coverage. (If you comple-
ted Worksheet A, these are the months for which you checked a box on line 1 of the worksheet.)
Months in 2021 . . . . . . Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
1. Enter APTC from
Form 1095-A, Part
III, column
C . . . . . .
2. Enter the monthly
credit amount from
Form 8962, Part II,
column (e) . . . . .
3. Subtract line 2
from line 1. If zero
or less, leave this
line blank and skip
lines 4 through 10
for the
month . . . . . . . .
4. Enter the monthly
premium amount
from Form 1095-A,
Part III, column A . .
5. Enter the SLCSP
premium from
Form 1095-A, Part
III, column B . . . . . .
6. Enter the monthly
contribution
amount from Form
8962, line 8b . . . . .
7. Subtract line 6
from line 5 . . . . .
8. Enter the smaller
of line 4 or
line 7 . . . . .
9. Subtract line 8
from line 1. If zero
or less,
enter -0- . . . . .
10. Subtract line 9
from line 3 . . . . .
11. Add the amounts on line 10. If all of your line 3 results were zero or less, stop here. None of your excess APTC was from
individuals who were not lawfully present. Enter the repayment limitation amount from Table 5 in the Form 8962 instructions
on Form 8962, line 28, and continue to line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the repayment limitation amount from Table 5 in the Form 8962 instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Add lines 11 and 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Enter the amount from Form 8962, line 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Compare lines 13 and 14.
• If line 14 is more than line 13, enter the amount from line 13 on Form 8962, lines 28 and 29, and follow the instructions for
line 29.
• If line 14 is less than or equal to line 13, leave Form 8962, line 28, blank and enter the amount from line 27 on line 29.
Page 24 Publication 974 (2021)
Andrew’s Worksheet A. Do You Have Any Reference Months?
Use this worksheet to determine whether you have any reference months.
✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓
Months in 2021Publication 974 (2021) Page 25
Andrew's Worksheet B. Excess APTC That Must Be Repaid
Complete columns only for the months a not lawfully present family member was enrolled in coverage. (If you comple-
ted Worksheet A, these are the months for which you checked a box on line 1 of the worksheet.)
Months in 2021 . . . . . . Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
1. Enter APTC from
Form 1095-A, Part
III, column
C . . . . . . $953 $953 $953
2. Enter the monthly
credit amount from
Form 8962, Part II,
column
(e) . . . . . . . . . . . 600 600 600
3. Subtract line 2
from line 1. If zero
or less, leave this
line blank and skip
lines 4 through 10
for the
month . . . . . . . . 353 353 353
4. Enter the monthly
premium amount
from Form 1095-A,
Part III, column A . . 1,000 1,000 1,000
5. Enter the SLCSP
premium from
Form 1095-A, Part
III, column
B . . . . . . 1,200 1,200 1,200
6. Enter the monthly
contribution
amount from Form
8962, line 8b . . . . . 300 300 300
7. Subtract line 6
from line 5 . . . . . 900 900 900
8. Enter the smaller
of line 4 or
line 7 . . . . . 900 900 900
9. Subtract line 8
from line 1. If zero
or less,
enter -0- . . . . . 53 53 53
10. Subtract line 9
from line 3 . . . . . 300 300 300
11. Add the amounts on line 10. If all of your line 3 results were zero or less, stop here. None of your excess APTC was from
individuals who were not lawfully present. Enter the repayment limitation amount from Table 5 in the Form 8962 instructions
on Form 8962, line 28, and continue to line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. 900
12. Enter the repayment limitation amount from Table 5 in the Form 8962 instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. 1,600
13. Add lines 11 and 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. 2,500
14. Enter the amount from Form 8962, line 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14. 1,936
15. Compare lines 13 and 14.
• If line 14 is more than line 13, enter the amount from line 13 on Form 8962, lines 28 and 29, and follow the instructions for
line 29.
• If line 14 is less than or equal to line 13, leave Form 8962, line 28, blank and enter the amount from line 27 on line 29.
Page 26 Publication 974 (2021)
Determining the Premium for
the Applicable Second Lowest
Cost Silver Plan (SLCSP)
If you or a member of your family enrolls in a qualified
health plan and APTC is paid for the coverage, the Mar-
ketplace will generally identify the applicable SLCSP pre-
mium and report it on Form 1095-A. The Marketplace de-
termines the applicable SLCSP premium based on your
address and the members of your coverage family. Pro-
viding correct information on your application for financial
assistance and notifying the Marketplace if you move or
the members of your coverage family change are neces-
sary for the Marketplace to report a correct applicable
SLCSP premium. If the Marketplace does not have accu-
rate and updated information, the applicable SLCSP pre-
mium the Marketplace reports on Form 1095-A may not
be accurate for all months and you will need to determine
the correct applicable SLCSP premium for those months.
See Applicable SLCSP premium tools below.
If you did not request financial assistance (APTC) and
the Marketplace has an applicable SLCSP premium tool
(discussed in the next paragraph), the Marketplace will
not report an applicable SLCSP premium (Part III, column
B, will report -0- or be blank). If you did not request finan-
cial assistance (APTC) and the Marketplace does not
have an applicable SLCSP premium tool, it may report an
SLCSP premium that applies to everyone enrolled in your
qualified health plan because it may not be able to identify
the members of your coverage family from the information
on your application. If you take the PTC on your tax return,
you will need to determine the SLCSP premium that ap-
plies to your coverage family for each month of coverage.
Applicable SLCSP premium tools. Only the Marketpla-
ces are able to provide applicable SLCSP premiums. The
federally facilitated Marketplace and most state Market-
places have provided applicable SLCSP premium tools
that, as you prepare your tax return, you may use to look
up the SLCSP premium that applies to your coverage
family for each month. If you enrolled through the federally
facilitated Marketplace, you will find the tool at
HealthCare.gov/Tax-Tool/.
If you enrolled through a state-based Marketplace, you
may find information about whether your state has an ap-
plicable SLCSP premium tool on the state-based Market-
place’s website. If the website does not have an applica-
ble SLCSP premium tool, you will need to contact the
state-based Marketplace directly for the correct SLCSP
premium.
Allocating Policy Amounts for
Individuals With No One in
Their Tax Family
If an individual you enrolled in coverage is not included in
any tax family, you must reconcile the APTC paid for the
individual’s coverage, even if you are claimed as a de-
pendent by another taxpayer. If you are enrolled in the
same policy as the individual not included in any tax fam-
ily, you have to allocate policy amounts even though the
conditions in the Form 8962 instructions for line 9 are not
met. Use the example below to complete Form 8962 if
your family size is zero but you have to allocate policy
amounts.
Example. Mark enrolls himself and his child, Donna, in
a qualified health plan with coverage effective for all of
2021. The Form 1095-A he received from the Marketplace
shows that $6,000 of APTC was paid for their coverage
($500 is entered in Part III, column C, for each of lines 21
through 32). Mark files an income tax return for 2021 on
Form 1040 and does not include anyone in his tax family.
Mark’s parents, Steve and Sherry, include Mark in their
tax family. No one includes Donna in their tax family. Be-
cause Mark enrolled Donna in coverage and no one in-
cludes Donna in their tax family, Mark must reconcile the
APTC paid for Donna’s coverage. Steve and Sherry must
reconcile the APTC paid for Mark’s coverage. Because
Steve and Sherry must reconcile the APTC paid for
Mark’s coverage and Mark must reconcile the APTC paid
for Donna’s coverage, Mark must complete Part IV of
Form 8962 to allocate policy amounts with Steve and
Sherry. Mark, Sherry, and Steve do not agree on an allo-
cation percentage. Mark completes Form 8962 as follows.
Lines 1, 2a, 3, 4, and 5. Mark enters -0-.
Line 9. Mark reads Allocating policy amounts under
Line 9 in the Form 8962 instructions. Although the first
condition in that discussion is not met, the allocation rules
still apply because the APTC must be reported on two
separate returns (Mark's for Donna; Steve and Sherry's
for Mark). He checks “Yes” on line 9. Then, he reads Ta-
ble 3 in the instructions. According to Step 3 in Table 3, he
must allocate in Part IV using the rules under Allocation
Situation 4. Other situations where a policy is shared be-
tween two tax families in the Form 8962 instructions.
Line 30 (Part IV). Mark enters the Marketplace-as-
signed policy number in column (a), Steve’s SSN in col-
umn (b), “01” in column (c), and “12” in column (d). He
leaves columns (e) and (f) blank because he is not an ap-
plicable taxpayer. He enters “0.50” in column (g). This is
the allocation percentage based on the rules under Allo-
cation Situation 4. Other situations where a policy is
shared between two tax families in the Form 8962 instruc-
tions.
Publication 974 (2021) Page 27
Lines 12 through 23, column (f). Mark enters $250
on each line (0.50 x the $500 APTC shown on his Form
1095-A).
Lines 25, 27, and 29. Mark enters $3,000 APTC,
which is the total of lines 12 through 23, column (f), on
these lines and on his Schedule 2 (Form 1040), line 2.
Allocation of Policy Amounts
Among Three or More
Taxpayers
This section covers allocations of policy amounts (enroll-
ment premiums, applicable SLCSP premiums, and APTC)
among three or more taxpayers.
Before you read this section, first read Part IV—Alloca-
tion of Policy Amounts in the Form 8962 instructions.
Then, use the following instructions to complete Part IV of
Form 8962 if one qualified health plan covers individuals
from three or more tax families in the same month. Specif-
ically, these instructions apply to:
• Taxpayers who must allocate policy amounts because
of a divorce or legal separation in 2021 and must also
allocate policy amounts with another taxpayer (for ex-
ample, a grandparent who includes in his or her tax
family a child enrolled with the former spouses);
• Taxpayers who must allocate policy amounts because
they are legally married but are not filing a joint return
(for example, filing their returns as married filing sepa-
rately), and must also allocate policy amounts with an-
other taxpayer (for example, a grandparent who in-
cludes in his or her tax family a child enrolled with the
spouses); and
• Other taxpayers who are including an individual in
their tax family who is enrolled in a qualified health
plan together with members of two or more other tax
families.
No APTC. If you or a member of your tax family is en-
rolled in a qualified health plan with members of two or
more other tax families and no APTC is paid for coverage
under the plan, use the instructions for Form 8962 under
Allocation Situation 3. No APTC to allocate the enrollment
premiums from the qualified health plan among the tax
families. You allocate the enrollment premiums in propor-
tion to the SLCSP premium that applies to each taxpayer
who has a coverage family member enrolled in the plan.
For purposes of this enrollment premium allocation, only
coverage family members enrolled in the plan are consid-
ered in determining the SLCSP premium that applies to
each taxpayer. You and the other taxpayers must com-
plete column (e) on the appropriate line in Part IV to allo-
cate the enrollment premiums to each family. Leave col-
umns (f) and (g) blank. See Missing or incorrect SLCSP
premium on Form 1095-A under Line 10 in the Form 8962
instructions to determine your applicable SLCSP premium
to use for the allocation.
Allocation Among Two Taxpayers
Who Divorced or Legally Separated in
2021 and One or More Other
Taxpayers
Use this section to allocate policy amounts from a quali-
fied health plan if you meet either of the following condi-
tions and no other allocations for the policy are necessary.
• You are allocating enrollment premiums, applicable
SLCSP premiums, and APTC with a former spouse as
a result of your divorce or legal separation in 2021 and
are also allocating amounts with another taxpayer who
is including an individual in his or her tax family who,
when you were married to the former spouse, was en-
rolled in a qualified health plan with members of your
and your former spouse’s tax families.
• You are the taxpayer who is including in your tax fam-
ily an individual enrolled in the plan with tax family
members of taxpayers who must also allocate policy
amounts as a result of divorce or separation in 2021.
Example. Kara and David and their two children, Mer-
edith and Sam, enroll in a qualified health plan for 2021.
Kara and David were married at the beginning of 2021
and divorce in 2021. Meredith and Sam move in with their
grandmother, Lydia, in May of 2021. Lydia claims Mere-
dith and Sam as dependents on her 2021 income tax re-
turn. Kara, David, and Lydia use this section to allocate
policy amounts to compute their respective PTC and rec-
oncile the PTC with the APTC paid.
Kara and David use the allocation method under Rules
for the Taxpayers Who Divorced or Legally Separated in
2021 and Are Also Allocating With Another Taxpayer next.
Lydia uses the allocation method under Rules for the
Taxpayer(s) Allocating With Taxpayers Who Divorced or
Legally Separated in 2021, later.
Rules for the Taxpayers Who Divorced or
Legally Separated in 2021 and Are Also
Allocating With Another Taxpayer
Use this allocation method if you divorced or legally sepa-
rated during the year and you must allocate policy
amounts (enrollment premiums, applicable SLCSP premi-
ums, and APTC) with your former spouse as well as with
another taxpayer who is including in his or her tax family
an individual enrolled in a qualified health plan with mem-
bers of your and your former spouse’s tax families.
Step 1. Determine an allocation percentage with your for-
mer spouse. You use this percentage to allocate the total
enrollment premiums, the applicable SLCSP premiums,
and APTC for coverage under the plan during the months
you were married. You will find these amounts on your
Form(s) 1095-A, Part III, columns A, B, and C, respec-
tively. You and your former spouse can allocate these
amounts using any percentage you agree on from -0- to
100, but you must allocate all amounts using the same
percentage. If you do not agree on a percentage, you and
Page 28 Publication 974 (2021)
your former spouse must allocate 50% of each of these
amounts to each of you.
Step 2. Separately from the first allocation, determine an
allocation percentage with the taxpayer(s) who included in
his or her tax family the individual(s) enrolled in the plan
with a member of your tax family or a member of your for-
mer spouse’s tax family. You may agree on any allocation
percentage from -0- to 100. You may use the percentage
you agreed on for every month that this allocation rule ap-
plies, or you may agree on different percentages for differ-
ent months. However, you must use the same allocation
percentage for all policy amounts (enrollment premiums,
applicable SLCSP premiums, and APTC) in a month. If
you cannot agree on an allocation percentage, the alloca-
tion percentage is equal to the number of individuals the
other taxpayer includes in his or her tax family for the tax
year who were enrolled in the plan for which you are allo-
cating policy amounts, divided by the total number of indi-
viduals enrolled in the qualified health plan. The allocation
percentage is the percentage that applies to the amounts
the other taxpayer must use to compute the PTC and rec-
oncile it with APTC. You and your former spouse must
compute the PTC and reconcile APTC using the remain-
ing amounts.
Step 3. Complete Worksheet C below.
Worksheet C. Allocations for the Divorced or
Legally Separated Taxpayers
1. Enter as a decimal your percentage from
Step 1 above . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 1.0
3. Enter as a decimal the total of the
percentage(s) from Step 2 above
allocated to the other taxpayer(s).
Note. See Example 2, later, for details on
adding the percentages for multiple
taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Subtract line 3 from line 2 . . . . . . . . . . . . . 4.
5. Multiply line 1 by line 4. Enter the result as
a decimal. This is your allocation
percentage. Go to Step 4 below . . . . . . . . 5.
Step 4. If you use the same percentage in Step 2 above
for every month to which this allocation method applies,
use only one of lines 30 through 33 in Part IV to report the
allocation. If you use different percentages for different
months under Step 2, use a separate line in Part IV for
each allocation percentage. Complete the line as ex-
plained below.
Column (a). Enter the Marketplace-assigned policy
number from Form 1095-A, line 2. If the policy number on
the Form 1095-A is more than 15 characters, enter only
the last 15 characters.
Column (b). Enter the SSN of your former spouse.
Column (c). Enter the first month you are allocating
policy amounts. For example, if you are allocating a per-
centage from January through June, enter “01” in column
(c).
Column (d). Enter the last month you are allocating
policy amounts. For example, if you are allocating a per-
centage from January through June, enter “06” in column
(d).
Column (e). Enter the decimal from Worksheet C,
line 5.
Column (f). Enter the decimal from Worksheet C,
line 5.
Column (g). Enter the decimal from Worksheet C,
line 5.
Rules for the Taxpayer(s) Allocating With
Taxpayers Who Divorced or Legally
Separated in 2021
Use this allocation method if you are including in your tax
family one or more individuals who were enrolled in a
qualified health plan with members of the tax families of
other taxpayers who must also allocate policy amounts as
a result of divorce or legal separation in 2021.
Step 1. Determine an allocation percentage with one of
the former spouses. You may agree on any allocation per-
centage from -0- to 100. You may use the percentage you
agreed on for every month during which this allocation
rule applies, or you may agree on different percentages
for different months. However, you must use the same al-
location percentage for all policy amounts (enrollment pre-
miums, applicable SLCSP premiums, and APTC) in a
month. If you cannot agree on an allocation percentage,
the allocation percentage is equal to the number of indi-
viduals you include in your tax family for the tax year who
were enrolled in the qualified health plan for which you are
allocating policy amounts, divided by the total number of
individuals enrolled in the plan. The allocation percentage
is the percentage that applies to the amounts you must
use to compute the PTC and reconcile it with APTC. The
former spouse must compute the PTC and reconcile
APTC using the remaining amounts.
Step 2. Allocate the policy amounts with the second for-
mer spouse using the same rules as Step 1 above. Enter
the percentage on line 4 of Worksheet D.
Step 3. Complete Worksheet D below.
Publication 974 (2021) Page 29
Worksheet D. Taxpayer Allocating With
Divorced or Separated Taxpayers
1. Enter the decimal from line 1 of the
Worksheet C completed by one of the
former spouses from Step 1 above . . . . . . . 1.
2. Enter as a decimal the percentage from
Step 1 above . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Multiply line 1 by line 2 . . . . . . . . . . . . . . . . 3.
4. Enter the decimal from line 1 of the
Worksheet C completed by the other former
spouse from Step 2 above . . . . . . . . . . . . . 4.
5. Enter as a decimal the percentage from
Step 2 above . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Multiply line 4 by line 5 . . . . . . . . . . . . . . . . . 6.
7. Add line 3 and line 6. This is the allocation
percentage. Go to Step 4 below . . . . . . . . . 7.
Step 4. If you use the same percentages in Steps 1 and 2
above for every month to which this allocation method ap-
plies, use only one of lines 30 through 33 in Part IV to re-
port the allocation. If you use different percentages for dif-
ferent months in Step 1 or Step 2, use a separate line in
Part IV for each allocation percentage. Complete the line
as explained below.
Column (a). Enter the Marketplace-assigned policy
number from Form 1095-A, line 2. If the policy number on
the Form 1095-A is more than 15 characters, enter only
the last 15 characters.
Column (b). Enter the SSN of the former spouse
whose percentage you entered in Worksheet D, line 1.
Column (c). Enter the first month you are allocating
policy amounts. For example, if you are allocating a per-
centage from January through June, enter “01” in column
(c).
Column (d). Enter the last month you are allocating
policy amounts. For example, if you are allocating a per-
centage from January through June, enter “06” in column
(d).
Column (e). Enter the decimal from Worksheet D,
line 7.
Columns (f) and (g). Enter the decimal from Work-
sheet D, line 7.
Example 1. Kara and David were married at the be-
ginning of 2021 and have two children, Meredith and
Sam. Kara enrolled herself, David, Meredith, and Sam in a
qualified health plan with coverage effective January 1.
For each month of coverage, the enrollment premiums
were $700, the applicable SLCSP premium for a coverage
family of four was $650, and the APTC was $425.
Meredith and Sam moved in with their grandmother,
Lydia, in May. Kara and David divorced in September.
Kara enrolled in a new qualified health plan for self-only
coverage. David became eligible for and enrolled in em-
ployer-sponsored self-only coverage. Meredith and Sam
became eligible for and enrolled in government-spon-
sored coverage. All of the new plans have coverage
effective October 1. Lydia is enrolled in employer-spon-
sored coverage.
On their respective tax returns, Kara files as single and
includes only herself in her tax family; David files as single
and includes only himself in his tax family; and Lydia files
as head of household and includes Meredith and Sam in
her tax family.
Under Step 1 of Rules for the Taxpayers Who Divorced
or Legally Separated in 2021 and Are Also Allocating With
Another Taxpayer, Kara and David agree to allocate the
policy amounts 30% to Kara and 70% to David. Under
Step 2 of that method (Kara, David) and under Rules for
the Taxpayer(s) Allocating With Taxpayers Who Divorced
or Legally Separated in 2021 (Lydia), Kara and Lydia
agree to allocate 80% of the policy amounts to Lydia, and
David and Lydia agree to allocate 50% of the policy
amounts to Lydia. Each of them completes a worksheet
as shown below and uses it to complete Part IV.
Kara completes Worksheet C as follows.
Kara's Worksheet C. Allocations for Divorced
or Legally Separated Taxpayers
1. Enter as a decimal your percentage from
Step 1 above . . . . . . . . . . . . . . . . . . . . . 1. 0.30
2. Enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . . . 2. 1.0
3. Enter as a decimal the total of the
percentages from Step 2 above
allocated to the other taxpayer(s) . . . . 3. 0.80
4. Subtract line 3 from line 2 . . . . . . . . . . . 4. 0.20
5. Multiply line 1 by line 4. Enter the result
as a decimal. This is the allocation
percentage. Go to Step 4 below . . . . . . 5. 0.06
After completing Worksheet C, Kara completes Form
8962, Part IV, line 30, as follows.
Column (a). Kara enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). Kara enters David's SSN.
Column (c). Kara enters “01.”
Column (d). Kara enters “09.”
Columns (e), (f), and (g). Kara enters “0.06.”
After completing Part IV, Kara multiplies the amounts
from Form 1095-A, Part III, by the corresponding percen-
tages in Part IV, and enters these allocated amounts on
Form 8962, lines 12 through 20, columns (a), (b), and (f).
On each of those lines, she will enter $42 in column (a)
(enrollment premiums of $700 x 0.06), $39 in column (b)
(applicable SLCSP premium of $650 x 0.06), and $26 in
column (f) (APTC of $425 x 0.06). She completes her
Form 8962, lines 21 through 23, columns (a), (b), and (f),
by entering the monthly amounts from her separate Form
1095-A for her self-only coverage from October through
December. She does not allocate those amounts.
David completes Worksheet C as follows.
Page 30 Publication 974 (2021)
David's Worksheet C. Allocations for
Divorced or Legally Separated Taxpayers
1. Enter as a decimal your percentage
from Step 1 above . . . . . . . . . . . . . . . . 1. 0.70
2. Enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . . 2. 1.0
3. Enter as a decimal the total of the
percentages from Step 2 above
allocated to the other
taxpayer(s) . . . . . . . . . . . . . . . . . . . . . . 3. 0.50
4. Subtract line 3 from line 2 . . . . . . . . . . 4. 0.50
5. Multiply line 1 by line 4. Enter the result
as a decimal. This is the allocation
percentage. Go to Step 4 below . . . . . 5. 0.35
After completing Worksheet C, David completes Form
8962, Part IV, line 30, as follows.
Column (a). David enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). David enters Kara's SSN.
Column (c). David enters “01.”
Column (d). David enters “09.”
Columns (e), (f), and (g). David enters “0.35.”
After completing Part IV, David multiplies the amounts
from Form 1095-A, Part III, by the corresponding percen-
tages in Part IV, and enters these allocated amounts on
Form 8962, lines 12 through 20, columns (a), (b), and (f).
On each of those lines, he will enter $245 in column (a)
(enrollment premiums of $700 x 0.35), $228 in column (b)
(applicable SLCSP premium of $650 x 0.35), and $149 in
column (f) (APTC of $425 x 0.35). David leaves Form
8962, lines 21 through 23, blank because he was not en-
rolled in a qualified health plan during October through
December.
Lydia completes Worksheet D as follows.
Lydia's Worksheet D. Taxpayer Allocating
With Divorced or Legally Separated
Taxpayers
1. Enter the decimal from line 1 of the
Worksheet C completed by one of the
former spouses from Step 1
above . . . . . . . . . . . . . . . . . . . . . . . . . 1. 0.30
2. Enter as a decimal the percentage
from Step 1 above . . . . . . . . . . . . . . . 2. 0.80
3. Multiply line 1 by line 2 . . . . . . . . . . . . 3. 0.24
4. Enter the decimal from line 1 of the
Worksheet C completed by the other
former spouse from Step 2
above . . . . . . . . . . . . . . . . . . . . . . . . . 4. 0.70
5. Enter as a decimal the percentage
from Step 2 above . . . . . . . . . . . . . . . 5. 0.50
6. Multiply line 4 by line 5 . . . . . . . . . . . . 6. 0.35
7. Add line 3 and line 6. This is the
allocation percentage. Go to Step 4
below . . . . . . . . . . . . . . . . . . . . . . . . . . 7. 0.59
After completing Worksheet D, Lydia completes Form
8962, Part IV, line 30, as follows.
Column (a). Lydia enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). Lydia enters Kara's SSN.
Column (c). Lydia enters “01.”
Column (d). Lydia enters “09.”
Columns (e), (f), and (g). Lydia enters “0.59.”
After completing Part IV, Lydia multiplies the amounts
from Form 1095-A, Part III, by the corresponding percen-
tages in Part IV, and enters these allocated amounts on
Form 8962, lines 12 through 20, columns (a), (b), and (f).
On each of those lines, she will enter $413 in column (a)
(enrollment premiums of $700 x 0.59), $384 in column (b)
(applicable SLCSP premium of $650 x 0.59), and $251 in
column (f) (APTC of $425 x 0.59). Lydia leaves Form
8962, lines 21 through 23, blank because she, Meredith,
and Sam were not enrolled in a qualified health plan dur-
ing October through December.
Example 2. The facts are the same as in Example 1,
except that in May, Meredith moved in with her grand-
mother, Lydia, and Sam moved in with his aunt, Kimberly.
On their respective tax returns, Kara files as single and
includes only herself in her tax family; David files as single
and includes only himself in his tax family; Lydia files as
head of household and includes Meredith in her tax fam-
ily; and Kimberly files as head of household and includes
Sam in her tax family. Kimberly is enrolled in em-
ployer-sponsored coverage.
Under Step 1 of Rules for the Taxpayers Who Divorced
or Legally Separated in 2021 and Are Also Allocating With
Another Taxpayer, Kara and David agree to allocate the
policy amounts 40% to Kara and 60% to David. Under
Step 2 of that method (Kara, David) and under Rules for
Publication 974 (2021) Page 31
the Taxpayer(s) Allocating With Taxpayers Who Divorced
or Legally Separated in 2021 (Lydia, Kimberly), Kara and
Lydia agree to allocate 50% of the policy amounts to Ly-
dia, and Kara and Kimberly agree to allocate 25% of the
policy amounts to Kimberly. David and Lydia agree to allo-
cate 20% of the policy amounts to Lydia, and David and
Kimberly agree to allocate 25% of the policy amounts to
Kimberly. Each of them completes a worksheet as shown
below and uses it to complete Part IV.
Kara completes Worksheet C as follows.
Kara's Worksheet C. Allocations for Divorced
or Legally Separated Taxpayers
1. Enter as a decimal your percentage
from Step 1 above . . . . . . . . . . . . . . . . . 1. 0.40
2. Enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . . . 2. 1.0
3. Enter as a decimal the total of the
percentages from Step 2 above
allocated to the other
taxpayer(s) . . . . . . . . . . . . . . . . . . . . . . . 3. 0.75*
4. Subtract line 3 from line 2 . . . . . . . . . . . 4. 0.25
5. Multiply line 1 by line 4. Enter the result
as a decimal. This is the allocation
percentage. Go to Step 4 below . . . . . . 5. 0.10
* This is the total of Kara's agreed percentages with Lydia and
Kimberly (0.50 + 0.25).
After completing Worksheet C, Kara completes Form
8962, Part IV, line 30, as follows.
Column (a). Kara enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). Kara enters David's SSN.
Column (c). Kara enters “01.”
Column (d). Kara enters “09.”
Columns (e), (f), and (g). Kara enters “0.10.”
After completing Part IV, Kara completes her Form
8962 in the same manner described in Example 1, earlier,
but applies the different allocation percentage.
David completes Worksheet C as follows.
David's Worksheet C. Allocations for
Divorced or Legally Separated Taxpayers
1. Enter as a decimal your percentage
from Step 1 above . . . . . . . . . . . . . . . . 1. 0.60
2. Enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . . 2. 1.0
3. Enter as a decimal the total of the
percentages from Step 2 above
allocated to the other
taxpayer(s) . . . . . . . . . . . . . . . . . . . . . . 3. 0.45*
4. Subtract line 3 from line 2 . . . . . . . . . . 4. 0.55
5. Multiply line 1 by line 4. Enter the result
as a decimal. This is the allocation
percentage. Go to Step 4
below . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. 0.33
* This is the total of David's agreed percentages with Lydia
and Kimberly (0.20 + 0.25).
After completing Worksheet C, David completes Form
8962, Part IV, line 30, as follows.
Column (a). David enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). David enters Kara's SSN.
Column (c). David enters “01.”
Column (d). David enters “09.”
Columns (e), (f), and (g). David enters “0.33.”
After completing Part IV, David completes his Form
8962 in the same manner described in Example 1, earlier,
but applies the different allocation percentage.
Lydia completes Worksheet D as follows.
Lydia's Worksheet D. Taxpayer Allocating
With Divorced or Legally Separated
Taxpayers
1. Enter the decimal from line 1 of the
Worksheet C completed by one of the
former spouses from Step 1
above . . . . . . . . . . . . . . . . . . . . . . . . . 1. 0.40
2. Enter as a decimal the percentage
from Step 1 above . . . . . . . . . . . . . . . 2. 0.50
3. Multiply line 1 by line 2 . . . . . . . . . . . . 3. 0.20
4. Enter the decimal from line 1 of the
Worksheet C completed by the other
former spouse from Step 2
above . . . . . . . . . . . . . . . . . . . . . . . . . 4. 0.60
5. Enter as a decimal the percentage
from Step 2 above . . . . . . . . . . . . . . . 5. 0.20
6. Multiply line 4 by line 5 . . . . . . . . . . . . 6. 0.12
7. Add line 3 and line 6. This is the
allocation percentage. Go to Step 4
below . . . . . . . . . . . . . . . . . . . . . . . . . . 7. 0.32
After completing Worksheet D, Lydia completes Form
8962, Part IV, line 30, as follows.
Column (a). Lydia enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). Lydia enters Kara's SSN.
Column (c). Lydia enters “01.”
Column (d). Lydia enters “09.”
Columns (e), (f), and (g). Lydia enters “0.32.”
After completing Part IV, Lydia completes her Form
8962 in the same manner as in Example 1, earlier, but ap-
plies the different allocation percentage.
Kimberly completes Worksheet D as follows.
Page 32 Publication 974 (2021)
Kimberly's Worksheet D. Taxpayer Allocating
With Divorced or Legally Separated
Taxpayers
1. Enter the decimal from line 1 of the
Worksheet C completed by one of the
former spouses from Step 1
above . . . . . . . . . . . . . . . . . . . . . . . . . 1. 0.40
2. Enter as a decimal the percentage
from Step 1 above . . . . . . . . . . . . . . . 2. 0.25
3. Multiply line 1 by line 2 . . . . . . . . . . . . 3. 0.10
4. Enter the decimal from line 1 of the
Worksheet C completed by the other
former spouse from Step 2
above . . . . . . . . . . . . . . . . . . . . . . . . . 4. 0.60
5. Enter as a decimal the percentage
from Step 2 above . . . . . . . . . . . . . . . 5. 0.25
6. Multiply line 4 by line 5 . . . . . . . . . . . . 6. 0.15
7. Add line 3 and line 6. This is the
allocation percentage. Go to Step 4
below . . . . . . . . . . . . . . . . . . . . . . . . . . 7. 0.25
After completing Worksheet D, Kimberly completes
Form 8962, Part IV, line 30, as follows.
Column (a). Kimberly enters the Marketplace-as-
signed policy number from Form 1095-A, line 2.
Column (b). Kimberly enters Kara's SSN.
Column (c). Kimberly enters “01.”
Column (d). Kimberly enters “09.”
Columns (e), (f), and (g). Kimberly enters “0.25.”
After completing Part IV, Kimberly completes her Form
8962 in the same manner described for Lydia in Exam-
ple 1, earlier, but applies the different allocation percent-
age.
Allocation Among Taxpayers Who Are
Married But Not Filing a Joint Return
and One or More Other Taxpayers
Use this section if you meet either of the following condi-
tions and no other allocations for the policy are necessary.
• You are allocating enrollment premiums and APTC
with a spouse to whom you are legally married but not
filing a joint return in 2021 and you are also allocating
enrollment premiums, applicable SLCSP premiums,
and APTC with another taxpayer who is including in
his or her tax family an individual who was enrolled in
a qualified health plan with members of your and your
spouse’s tax families.
• You are the taxpayer who is including in your tax fam-
ily an individual who was enrolled in the plan with tax
family members of taxpayers who must also allocate
policy amounts because the taxpayers are legally
married but not filing a joint return in 2021.
Example. Pat and Jamie were married for all of 2021
and have three children, Jason, Alicia, and Dawn. All five
individuals enrolled in a qualified health plan and were
covered for all of 2021. At enrollment, Pat and Jamie ex-
pected to file a joint return and include the children in their
tax family for the year of coverage. However, Pat and Ja-
mie change their minds and file as married filing sepa-
rately and each includes only themselves in their respec-
tive tax family. Neither checks the box in the top
right-hand corner of Form 8962. Jason, Alicia, and Dawn
moved in with their uncle, Andy, in April. Andy files as
head of household and includes Jason, Alicia, and Dawn
in his tax family.
Pat and Jamie use the allocation method under Rules
for the Married Taxpayers Not Filing a Joint Return and
Also Allocating With Another Taxpayer next.
Andy uses the allocation method under Rules for the
Taxpayer(s) Allocating With Married Taxpayers Not Filing
a Joint Return, later.
Rules for the Married Taxpayers Not Filing a
Joint Return and Also Allocating With
Another Taxpayer
Use this allocation method if you are married but not filing
a joint return and you must allocate policy amounts with
your spouse and with a taxpayer who is including in his or
her tax family an individual enrolled in a qualified health
plan with members of your and your spouse’s tax families.
Under this method, you must first allocate 50% each of
enrollment premiums and APTC to yourself and your
spouse. Line 4 of Worksheet E accomplishes this 50% al-
location. Complete the steps below to determine the
amounts to enter on your Form 8962, Part IV.
Step 1. Determine the applicable SLCSP for your cover-
age family. See Determining the Premium for the Applica-
ble Second Lowest Cost Silver Plan (SLCSP), earlier. For
this purpose, your coverage family or your spouse’s cov-
erage family (but not both) should include the individuals
the other taxpayer is including in his or her tax family and
who was enrolled in a qualified health plan with your and
your spouse’s tax family members. Enter the applicable
SLCSP premium you determined on line 5 of Worksheet
E.
Step 2. Separately from the first allocation (the 50%
spousal allocation), determine an allocation percentage
with the taxpayer(s) including in their tax family the individ-
ual(s) enrolled in the plan. You may agree on any alloca-
tion percentage from -0- to 100. You may use the percent-
age you agreed on for every month in which this allocation
rule applies, or you may agree on different percentages
for different months. However, you must use the same al-
location percentage for all policy amounts (enrollment pre-
miums, applicable SLCSP premiums, and APTC) in a
month. If you cannot agree on an allocation percentage,
the allocation percentage is equal to the number of indi-
viduals the other taxpayer includes in his or her tax family
for the tax year who were enrolled in the qualified health
plan for which you are allocating amounts, divided by the
Publication 974 (2021) Page 33
total number of individuals enrolled in the plan. The alloca-
tion percentage is the percentage that applies to the
amounts the other taxpayer must use to compute the PTC
and reconcile it with APTC. You must compute the PTC
and reconcile APTC using the remaining amounts.
Step 3. Complete Worksheet E below.
Worksheet E. Allocations for Married
Taxpayers Not Filing a Joint Return
1. Enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . 1. 1.0
2. Enter as a decimal the total of the
percentage(s) from Step 2 above
allocated to the other
taxpayer(s) . . . . . . . . . . . . . . . . . . . . . 2.
3. Subtract line 2 from line 1 . . . . . . . . . 3.
4. Divide line 3 by 2.0. Enter the result as
a decimal . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter the applicable SLCSP premium
as determined in Step 1 above. Then,
go to line 6 if you checked the box in
the top right-hand corner of Form
8962, or Exception 1—Certain married
persons living apart under Married
taxpayers (discussed earlier under
Terms You May Need To Know)
applies to you. Otherwise, stop
here . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Multiply line 5 by line 3. Complete
Form 8962, Part IV, as instructed in
Step 4 below . . . . . . . . . . . . . . . . . . . . 6.
Step 4. If you use the same percentage for every month
during which this allocation method applies, use only one
of lines 30 through 33 in Part IV to report the allocation. If
you use different percentages for different months under
Step 2, use a separate line in Part IV for each allocation
percentage. Complete the line as explained below.
Column (a). Enter the Marketplace-assigned policy
number from Form 1095-A, line 2. If the policy number on
the Form 1095-A is more than 15 characters, enter only
the last 15 characters.
Column (b). Enter the SSN of your spouse.
Column (c). Enter the first month you are allocating
policy amounts. For example, if you are allocating a per-
centage from January through June, enter “01” in column
(c).
Column (d). Enter the last month you are allocating
policy amounts. For example, if you are allocating a per-
centage from January through June, enter “06” in column
(d).
Column (e). If your filing status is married filing sepa-
rately and you did not check the box in the top right-hand
corner of Form 8962, leave column (e) blank. If you
checked the box, or Exception 1—Certain married per-
sons living apart under Married taxpayers (discussed ear-
lier under Terms You May Need To Know) applies to you,
enter the decimal from line 4 of Worksheet E in column
(e).
Column (f). If your filing status is married filing sepa-
rately and you did not check the box in the top right-hand
corner of Form 8962, leave column (f) blank. If you
checked the box, or Exception 1—Certain married per-
sons living apart under Married taxpayers (discussed ear-
lier under Terms You May Need To Know) applies to you,
enter the decimal from line 3 of Worksheet E in column (f)
and include the amount from line 6 of Worksheet E in the
totals on the appropriate lines of Form 8962, column (b),
for the months allocated.
Column (g). Enter the decimal from line 4 of Work-
sheet E.
Rules for the Taxpayer(s) Allocating With
Married Taxpayers Not Filing a Joint Return
Use this allocation method if you are including in your tax
family an individual who was enrolled in a qualified health
plan with tax family members of taxpayers who must also
allocate policy amounts because the taxpayers are legally
married but not filing a joint return in 2021.
Step 1. Determine an allocation percentage with one of
the spouses. You may agree on any allocation percentage
from -0- to 100. You may use the percentage you agreed
on for every month in which this allocation rule applies, or
you may agree on different percentages for different
months. However, you must use the same allocation per-
centage for all policy amounts (enrollment premiums, ap-
plicable SLCSP premiums, and APTC) in a month. If you
cannot agree on an allocation percentage, the allocation
percentage is equal to the number of individuals you will
include in your tax family for the tax year who were enrol-
led in the qualified health plan for which you are allocating
policy amounts, divided by the total number of individuals
enrolled in the plan. The allocation percentage is the per-
centage that applies to the amounts you must use to com-
pute the PTC and reconcile it with APTC. The spouses
must compute the PTC and reconcile APTC using the re-
maining amounts. Enter the percentage as a decimal on
line 1 of Worksheet F.
Step 2. Allocate the policy amounts with the second
spouse using the same rules as Step 1 above. Enter the
percentage as a decimal on line 3 of Worksheet F.
Step 3. Complete Worksheet F below.
Page 34 Publication 974 (2021)
Worksheet F. Taxpayer Allocating With
Married Taxpayers Not Filing a Joint Return
Part I: Allocation Percentage for Enrollment Premiums
and APTC Paid
1. Enter as a decimal the percentage
from Step 1 above . . . . . . . . . . . . . . . . 1.
2. Divide line 1 by 2.0. Enter the result as
a decimal . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter as a decimal the percentage
from Step 2 above . . . . . . . . . . . . . . . . 3.
4. Divide line 3 by 2.0. Enter the result as
a decimal . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Add lines 2 and 4. Enter the result as a
decimal. This is your allocation
percentage for enrollment premiums
and APTC paid . . . . . . . . . . . . . . . . . . . 5.
Part II: Allocation of the Applicable SLCSP Premium
6. Enter the amount of the applicable
SLCSP premium from line 5 of
Worksheet E completed by the spouse
in Step 1 above . . . . . . . . . . . . . . . . . . . 6.
7. Enter the decimal from line 1 of this
worksheet . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Multiply line 6 by line 7 . . . . . . . . . . . . . 8.
9. Enter the amount of the applicable
SLCSP premium from line 5 of
Worksheet E completed by the spouse
in Step 2 above . . . . . . . . . . . . . . . . . . . 9.
10. Enter the decimal from line 3 of this
worksheet . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Multiply line 9 by line 10 . . . . . . . . . . . . 11.
12. Add lines 8 and 11. This is the
applicable SLCSP premium allocated
to you that you must include on lines
12 through 23, column (b), for the
months in which this allocation
applies . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Step 4. If you use the same percentage for every month
during which this allocation method applies, use only one
of lines 30 through 33 in Part IV to report the allocation. If
you use different percentages for different months, use a
separate line in Part IV for each allocation percentage.
Complete the line as explained below.
Column (a). Enter the Marketplace-assigned policy
number from Form 1095-A, line 2. If the policy number on
the Form 1095-A is more than 15 characters, enter only
the last 15 characters.
Column (b). Enter the SSN of the spouse whose per-
centage you entered in Worksheet F, line 1.
Column (c). Enter the first month you are allocating
policy amounts. For example, if you are allocating a per-
centage from January through June, enter “01” in column
(c).
Column (d). Enter the last month you are allocating
policy amounts. For example, if you are allocating a
percentage from January through June, enter “06” in col-
umn (d).
Column (e). Enter the decimal from Worksheet F,
line 5.
Column (f). Leave column (f) blank.
Column (g). Enter the decimal from Worksheet F,
line 5.
Example. Pat and Jamie were married for all of 2021
and have three children, Jason, Alicia, and Dawn. All five
individuals enrolled in a qualified health plan and were
covered for all of 2021. For each month of coverage, the
enrollment premiums were $1,000, the premium for the
applicable SLCSP for a coverage family of five was $800,
and the APTC was $200. At enrollment, Pat and Jamie ex-
pected to file a joint return and include the children in their
tax family.
Jason, Alicia, and Dawn moved in with their uncle,
Andy, in April. On their respective tax returns, Pat and Ja-
mie file as married filing separately and each includes only
themselves in their respective tax family. Neither checks
the box in the top right-hand corner of Form 8962. Andy
files as head of household and includes Jason, Alicia, and
Dawn in his tax family.
Pat and Jamie allocate the enrollment premiums and
the APTC 50% to Pat and 50% to Jamie. Under Step 1 of
Rules for the Married Taxpayers Not Filing a Joint Return
and Also Allocating With Another Taxpayer, earlier, Pat
and Jamie determine that Pat’s coverage family will in-
clude Pat, Jason, and Alicia and that Jamie’s coverage
family will include Jamie and Dawn. Pat and Jamie each
look up their applicable SLCSP premiums. The applicable
SLCSP premium for Pat’s coverage family of three is $450
and the applicable SLCSP premium for Jamie’s coverage
family of two is $400.
Under Step 2 of Rules for the Married Taxpayers Not
Filing a Joint Return and Also Allocating With Another
Taxpayer (Pat, Jamie) and under Rules for the Tax-
payer(s) Allocating With Married Taxpayers Not Filing a
Joint Return (Andy), earlier, Pat and Andy agree to allo-
cate 67% of the policy amounts to Andy, and Jamie and
Andy agree to allocate 50% of the policy amounts to
Andy. Pat, Jamie, and Andy each complete a worksheet
as shown below and use it to complete Part IV.
Pat completes Worksheet E as follows.
Publication 974 (2021) Page 35
Pat's Worksheet E. Allocations for Married
Taxpayers Not Filing a Joint Return
1. Enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . . 1. 1.0
2. Enter as a decimal the total of the
percentage(s) from Step 2 above
allocated to the other
taxpayer(s) . . . . . . . . . . . . . . . . . . . . . . 2. 0.67
3. Subtract line 2 from line 1 . . . . . . . . . . 3. 0.33
4. Divide line 3 by 2.0. Enter the result as
a decimal . . . . . . . . . . . . . . . . . . . . . . . 4. 0.17
5. Enter the applicable SLCSP premium
as determined in Step 1 above. Then,
go to line 6 if you checked the box in
the top right-hand corner of Form
8962, or Exception 1—Certain married
persons living apart under Married
taxpayers (discussed earlier under
Terms You May Need To Know)
applies to you. Otherwise, stop
here . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. 450
6. Multiply line 5 by line 3. Complete
Form 8962, Part IV, as instructed in
Step 4 below . . . . . . . . . . . . . . . . . . . . . 6.
After completing Worksheet E, Pat completes Form
8962, Part IV, line 30, as follows.
Column (a). Pat enters the Marketplace-assigned pol-
icy number from Form 1095-A, line 2.
Column (b). Pat enters Jamie’s SSN.
Column (c). Pat enters “01.”
Column (d). Pat enters “12.”
Column (e). Pat leaves this column blank.
Column (f). Pat leaves this column blank.
Column (g). Pat enters “0.17.”
After completing Part IV, Pat multiplies the APTC from
Form 1095-A, Part III, column C, by the percentage in Part
IV, column (g), and enters $34 (APTC of $200 x 0.17) on
Form 8962, lines 12 through 23, column (f). Pat leaves
lines 12 through 23, columns (a) through (e), blank be-
cause he is not eligible to take the PTC.
Jamie completes Worksheet E as follows.
Jamie's Worksheet E. Allocations for Married
Taxpayers Not Filing a Joint Return
1. Enter 1.0 . . . . . . . . . . . . . . . . . . . . . . . 1. 1.0
2. Enter as a decimal the total of the
percentage(s) from Step 2 above
allocated to the other
taxpayer(s) . . . . . . . . . . . . . . . . . . . . . 2. 0.50
3. Subtract line 2 from line 1 . . . . . . . . . 3. 0.50
4. Divide line 3 by 2.0. Enter the result as
a decimal . . . . . . . . . . . . . . . . . . . . . . 4. 0.25
5. Enter the applicable SLCSP premium
as determined in Step 1 above. Then,
go to line 6 if you checked the box in
the top right-hand corner of Form
8962, or Exception 1—Certain married
persons living apart under Married
taxpayers (discussed earlier under
Terms You May Need To Know)
applies to you. Otherwise, stop
here . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. 400
6. Multiply line 5 by line 3. Complete
Form 8962, Part IV, as instructed in
Step 4 below . . . . . . . . . . . . . . . . . . . . 6.
After completing Worksheet E, Jamie completes Form
8962, Part IV, line 30, as follows.
Column (a). Jamie enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). Jamie enters Pat’s SSN.
Column (c). Jamie enters “01.”
Column (d). Jamie enters “12.”
Column (e). Jamie leaves this column blank.
Column (f). Jamie leaves this column blank.
Column (g). Jamie enters “0.25.”
After completing Part IV, Jamie multiplies the APTC
from Form 1095-A, Part III, column C, by the percentage
in Part IV, column (g), and enters $50 (APTC of $200 x
0.25) on Form 8962, lines 12 through 23, column (f). Ja-
mie leaves lines 12 through 23, columns (a) through (e),
blank because she is not eligible to take the PTC.
Andy completes Worksheet F as follows.
Page 36 Publication 974 (2021)
Andy's Worksheet F. Taxpayer Allocating
With Married Taxpayers Not Filing a Joint
Return
Part I: Allocation Percentage for Enrollment Premiums
and APTC Paid
1. Enter as a decimal the percentage
from Step 1 above . . . . . . . . . . . . . . . . 1. 0.67
2. Divide line 1 by 2.0. Enter the result as
a decimal . . . . . . . . . . . . . . . . . . . . . . . . 2. 0.34
3. Enter as a decimal the percentage
from Step 2 above . . . . . . . . . . . . . . . . 3. 0.50
4. Divide line 3 by 2.0. Enter the result as
a decimal . . . . . . . . . . . . . . . . . . . . . . . . 4. 0.25
5. Add lines 2 and 4. Enter the result as a
decimal. This is your allocation
percentage for enrollment premiums
and APTC paid . . . . . . . . . . . . . . . . . . . 5. 0.59
Part II: Allocation of the Applicable SLCSP Premium
6. Enter the amount of the applicable
SLCSP premium from line 5 of
Worksheet E completed by the spouse
in Step 1 above . . . . . . . . . . . . . . . . . . . 6. 450
7. Enter the decimal from line 1 of this
worksheet . . . . . . . . . . . . . . . . . . . . . . . 7. 0.67
8. Multiply line 6 by line 7 . . . . . . . . . . . . . 8. 302
9. Enter the amount of the applicable
SLCSP premium from line 5 of
Worksheet E completed by the spouse
in Step 2 above . . . . . . . . . . . . . . . . . . . 9. 400
10. Enter the decimal from line 3 of this
worksheet . . . . . . . . . . . . . . . . . . . . . . . 10. 0.50
11. Multiply line 9 by line 10 . . . . . . . . . . . . 11. 200
12. Add lines 8 and 11. This is the
applicable SLCSP premium allocated
to you that you must include on lines
12 through 23, column (b), for the
months in which this allocation
applies . . . . . . . . . . . . . . . . . . . . . . . . . . 12. 502
After completing Worksheet F, Andy completes Form
8962, Part IV, line 30, as follows.
Column (a). Andy enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). Andy enters Pat’s SSN.
Column (c). Andy enters “01.”
Column (d). Andy enters “12.”
Column (e). Andy enters “0.59.”
Column (f). Andy leaves this column blank.
Column (g). Andy enters “0.59.”
After completing Part IV, Andy multiplies the amounts
from Form 1095-A, Part III, by the corresponding percen-
tages in Part IV, and enters these allocated amounts on
Form 8962, lines 12 through 23, columns (a), (b), and (f).
On each of those lines, he will enter $590 in column (a)
(enrollment premiums of $1,000 x 0.59), $502 in column
(b) (applicable SLCSP premium allocated to him on Work-
sheet F, line 12), and $118 in column (f) (APTC of $200 x
0.59).
Other Taxpayers Allocating Policy
Amounts With Two or More Other
Taxpayers
If you or another person in your tax family was enrolled in
a qualified health plan with individuals in at least two other
tax families, APTC was paid for coverage under the pol-
icy, and you don't meet the rules for divorce or for married
individuals filing separate returns, you and the taxpayers
who are including in their tax family the individuals not in
your tax family should use the instructions for Form 8962
under Allocation Situation 4. Other situations where a pol-
icy is shared between two tax families to allocate amounts
from the qualified health plan. There must be an allocation
percentage for each taxpayer who is including in his or her
tax family an individual who is enrolled in a qualified health
plan with a member of your tax family. If you cannot agree
on an allocation percentage with all taxpayers who are in-
cluding enrolled individuals in a tax family, the allocation
percentage for a particular taxpayer is equal to the num-
ber of individuals the taxpayer will include in his or her tax
family for the tax year who were enrolled in the qualified
health plan for which you are allocating policy amounts,
divided by the total number of individuals enrolled in the
plan.
Example 1. Erik enrolled himself and his sons, Bill and
Arvind, in a qualified health plan with coverage effective
for all of 2021. For the year, the enrollment premiums
were $8,000; the premium for the applicable SLCSP for a
coverage family consisting of Erik, Bill, and Arvind was
$9,000; and the APTC paid for their coverage was $4,500.
In March, Bill dropped out of school to work full-time and
moved permanently into his own apartment. In May, Ar-
vind moved in with his mother Sharon, where he lived until
the end of 2021. On their respective tax returns, Erik files
as single and includes only himself in his tax family, Bill
files as single and includes only himself in his tax family,
and Sharon files as head of household and includes her-
self and Arvind in her tax family.
Erik and Bill agree to allocate 25% of the policy
amounts to Bill. Erik and Sharon agree to allocate 40% of
the policy amounts to Sharon. Erik allocates the remaining
35% of the policy amounts to himself.
Bill completes Form 8962, Part IV, line 30, as follows.
Column (a). Bill enters the Marketplace-assigned pol-
icy number from Form 1095-A, line 2.
Column (b). Bill enters Erik's SSN.
Column (c). Bill enters “01.”
Column (d). Bill enters “12.”
Columns (e), (f), and (g). Bill enters an allocation
percentage of “0.25” in columns (e), (f), and (g).
Publication 974 (2021) Page 37
After completing Part IV, Bill multiplies the amounts
from Form 1095-A, Part III, by the corresponding percen-
tages in Part IV, and enters these allocated amounts on
his Form 8962, lines 12 through 23, columns (a), (b), and
(f). The sum of his monthly entries will be $2,000 in col-
umn (a) (enrollment premiums of $8,000 x 0.25), $2,250 in
column (b) (applicable SLCSP premium of $9,000 x 0.25),
and $1,125 in column (f) (APTC of $4,500 x 0.25).
Sharon completes Form 8962, Part IV, line 30, as fol-
lows.
Column (a). Sharon enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). Sharon enters Erik’s SSN.
Column (c). Sharon enters “01.”
Column (d). Sharon enters “12.”
Columns (e), (f), and (g). Sharon enters an allocation
percentage of “0.40” in columns (e), (f), and (g).
After completing Part IV, Sharon multiplies the amounts
from Form 1095-A, Part III, by the corresponding percen-
tages in Part IV, and enters these allocated amounts on
Form 8962, lines 12 through 23, columns (a), (b), and (f).
The sum of her monthly entries will be $3,200 in column
(a) (enrollment premiums of $8,000 x 0.40), $3,600 in col-
umn (b) (applicable SLCSP premium of $9,000 x 0.40),
and $1,800 in column (f) (APTC of $4,500 x 0.40).
Erik completes Form 8962, Part IV, line 30, as follows.
Column (a). Erik enters the Marketplace-assigned
policy number from Form 1095-A, line 2.
Column (b). Erik enters either Bill’s SSN or Sharon’s
SSN.
Column (c). Erik enters “01.”
Column (d). Erik enters “12.”
Columns (e), (f), and (g). Erik enters an allocation
percentage of “0.35” in columns (e), (f), and (g), which is
the percentage of policy amounts not allocated to Bill or
Sharon.
After completing Part IV, Erik multiplies the amounts
from Form 1095-A, Part III, by the corresponding percen-
tages in Part IV, and enters these allocated amounts on
his Form 8962, lines 12 through 23, columns (a), (b), and
(f). The sum of his monthly entries will be $2,800 in col-
umn (a) (enrollment premiums of $8,000 x 0.35), $3,150 in
column (b) (applicable SLCSP of $9,000 x 0.35), and
$1,575 in column (f) (APTC of $4,500 x 0.35).
Example 2. The facts are the same as in Example 1,
except Erik and Bill cannot agree on an allocation per-
centage. Because Erik did not agree on an allocation per-
centage with all taxpayers who are including individuals in
a tax family, Bill and Sharon determine their allocation
percentages of 33% by dividing the number of enrolled in-
dividuals each will include in his or her tax family (1 each
for Bill and Sharon) by the number of individuals enrolled
in the plan (3, Erik, Bill, and Arvind). Erik’s allocation
percentage is 34%, which is the percentage of policy
amounts not allocated to Bill and Sharon. Each taxpayer
completes Part IV as explained in Example 1 using these
percentages.
Alternative Calculation for Year
of Marriage
If you got married during 2021 and APTC was paid for an
individual in your tax family, you may want to use the alter-
native calculation for year of marriage, an optional calcula-
tion that may reduce the amount of excess APTC you
would have to repay under the general rules. Before you
read this section, first read the instructions for line 9 in the
Instructions for Form 8962. Complete Table 4 and, if re-
quired, Worksheet 3 in those instructions.
If you do not meet either of the above conditions,
you are not eligible to elect the alternative calcu-
lation. Leave Form 8962, Part V, blank.
If you are eligible, electing the alternative calculation
may reduce the amount of excess APTC you have to re-
pay. Electing the alternative calculation is optional. Work-
sheet V will tell you whether the alternative calculation will
benefit you.
Before you begin the steps, determine your alterna-
tive family size and your spouse’s alternative family size
using the instructions under Alternative Family Size next.
Then, read Table A to determine which steps to complete.
Alternative Family Size
Alternative family size is used to determine an alternative
monthly contribution amount (see Monthly contribution
amount under Terms You May Need To Know, earlier) on
Worksheets I and III, which may reduce the amount of ex-
cess APTC for the pre-marriage months that you must re-
pay.
When determining your alternative family size, include
yourself and any individual in the tax family who qualifies
as your dependent for the year under the rules explained
in the Instructions for Form 1040 or the Instructions for
Form 1040-NR. Do not include any individual who does
not qualify as your dependent under those rules or who is
included in your spouse’s alternative family size.
When determining your spouse’s alternative family
size, include your spouse and any individual in the tax
family who qualifies as your spouse’s dependent for the
year under the rules explained in the Instructions for Form
1040 or the Instructions for Form 1040-NR. Do not include
any individual who does not qualify as your spouse’s de-
pendent under those rules or who is included in your alter-
native family size.
Note. You may include an individual who qualifies as
the dependent of both you and your spouse in either alter-
native family size.CAUTION
!
Page 38 Publication 974 (2021)
Example 1. Ron, Suzy, and their son Max have lived
together since July 2020. Ron and Suzy got married in Au-
gust 2021. Each of them had coverage under a qualified
health plan for the months before September. Max quali-
fies as Ron’s dependent under the rules explained in the
Instructions for Form 1040. Max also qualifies as Suzy’s
dependent under those rules. Ron and Suzy can include
Max in either alternative family size.
Example 2. Rob and his son Liam lived together from
January through May 2021. On June 10, 2021, Rob mar-
ried Tara. She moved in with Rob and Liam on June 11.
Each of them had coverage under a qualified health plan
for the months before July. Liam qualifies as Rob’s de-
pendent under the rules explained in the Instructions for
Form 1040. Liam also qualifies as Tara’s dependent un-
der those rules. (Liam is Tara’s stepchild and lived with
Tara for more than half of 2021.) Rob and Tara can in-
clude Liam in either alternative family size.
Example 3. Stacey and her daughter Leia lived to-
gether from January through July 2021. Stacey married
Vince in August 2021 and Vince moved in with Stacey and
Leia. Each of them had coverage under a qualified health
plan for the months before September. Leia qualifies as
Stacey’s dependent under the rules explained in the In-
structions for Form 1040. Leia does not qualify as Vince’s
dependent under those rules because Leia did not live
with Vince for more than half of 2021. Stacey must include
Leia in her alternative family size. Vince cannot include
Leia in his alternative family size.
Table A. Which Steps To Complete
Answer the following questions to determine which
steps to complete.
1. Have you determined your and your spouse's alternative family
size as explained earlier under Alternative Family Size?
Yes. Go to question 2.
No. Read Alternative Family Size. Then, go to question 2.
2. Is there an individual in your alternative family size (including
yourself) who was enrolled in a qualified health plan for 1 or more
of your pre-marriage months?*
Yes. Complete Steps 1, 2, and 5. Go to question 3.
No. Go to question 3.
3. Is there an individual in your spouse’s alternative family size
(including your spouse) who was enrolled in a qualified health plan
for 1 or more of your pre-marriage months?*
Yes. Complete Steps 3, 4, and 5. Go to question 4.
No. Go to question 4.
4. The instructions for Step 5 will prompt you to complete Worksheet
V. If you check the “Yes” box on Worksheet V, line 14, complete
Steps 6, 7, and 8.
* Your pre-marriage months include the month you got married.
If you completed Part IV of Form 8962, do not in-
clude any amounts from Form(s) 1095-A that
were allocated to another taxpayer when complet-
ing the steps for your and your spouse's alternative calcu-
lation.TIP
Step 1
Complete Worksheet I if there is an individual included in
your alternative family size who was enrolled in a qualified
health plan for 1 or more of your pre-marriage months.
Worksheet for Line 4 of Worksheet I
Use this worksheet to figure the amount to enter on line 4
of Worksheet I.
1. Enter the amount from line 2 of Worksheet I . . . . . . . 1.
2. Enter the amount from line 3 of
Worksheet I . . . . . . . . . . . . . . . . . . . 2.
3. Multiply the amount on line 2 by 4.0 . . . . . . . . . . . . . 3.
4. Is the amount on line 1 more than the amount on
line 3?
Yes. Enter 401 here and on line 4 of Worksheet I.
No. Divide the amount on line 1 by the amount on
line 2. If the result is not a whole percentage, do not
round; instead, multiply this number by 100 (to
express it as a percentage) and then drop any
numbers after the decimal point. Enter the result here
and on line 4 of Worksheet I. For example, for 0.9984,
enter the result as 99; for 1.8565, enter the result as
185; and for 3.997, enter the result as 399 . . . . . . . . 4.
Step 2
Complete Worksheet II to determine your alternative
monthly credit amounts to include on Form 8962, lines 12
through 23, column (e), for your pre-marriage months. En-
ter in columns A and B on Worksheet II the amounts from
columns A and B in Part III of the Form(s) 1095-A that re-
ports coverage for all individuals in your tax family enrol-
led in a qualified health plan for 1 or more pre-marriage
months, including yourself, who are (1) included in Part II
of a Form 1095-A sent to you for the pre-marriage months,
or (2) not included in Part II of the Form 1095-A sent to
you or to your spouse, but who are included in your alter-
native family size.
Missing or incorrect SLCSP premium. For your
pre-marriage months, if there were changes in your cover-
age family that you did not report to the Marketplace or
APTC was not paid for the coverage, or there is an individ-
ual in your coverage family not included in Part II of the
Form 1095-A sent to you who is included in your alterna-
tive family size, you may have to determine a new pre-
mium for your applicable SLCSP for those months. See
Determining the Premium for the Applicable Second Low-
est Cost Silver Plan (SLCSP), earlier.
Step 3
Complete Worksheet III if there is an individual included in
your spouse’s alternative family size who was enrolled in a
qualified health plan for one or more of your pre-marriage
months.
Worksheet for Line 4 of Worksheet III
Use this worksheet to figure the amount to enter on line 4
of Worksheet III.
Publication 974 (2021) Page 39
1. Enter the amount from line 2 of Worksheet III . . . . . 1.
2. Enter the amount from line 3 of
Worksheet III . . . . . . . . . . . . . . . . . . . 2.
3. Multiply the amount on line 2 by 4.0 . . . . . . . . . . . . 3.
4. Is the amount on line 1 more than the amount on
line 3?
Yes. Enter 401 here and on line 4 of Worksheet III.
No. Divide the amount on line 1 by the amount on
line 2. If the result is not a whole percentage, do not
round; instead, multiply this number by 100 (to
express it as a percentage) and then drop any
numbers after the decimal point. Enter the result here
and on line 4 of Worksheet III. For example, for
0.9984, enter the result as 99; for 1.8565, enter the
result as 185; and for 3.997, enter the result
as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Step 4
Complete Worksheet IV to determine your spouse's alter-
native monthly credit amounts to include on Form 8962,
lines 12 through 23, column (e), for your pre-marriage
months. Enter in columns A and B on Worksheet IV the
amounts from columns A and B in Part III of the Form(s)
1095-A that reports coverage for all individuals in your tax
family enrolled in a qualified health plan for 1 or more
pre-marriage months, including your spouse, who are (1)
included in Part II of a Form 1095-A sent to your spouse
for the pre-marriage months, or (2) not included in Part II
of the Form 1095-A sent to you or to your spouse, but who
are included in your spouse's alternative family size.
Missing or incorrect SLCSP premium. For your
pre-marriage months, if there were changes in your spou-
se’s coverage family that your spouse did not report to the
Marketplace or APTC was not paid for the coverage, or
there is an individual in your spouse’s coverage family not
included in Part II of the Form 1095-A sent to your spouse
who is included in your spouse’s alternative family size,
your spouse may have to determine a new premium for
the applicable SLCSP for those months. See Determining
the Premium for the Applicable Second Lowest Cost Sil-
ver Plan (SLCSP), earlier.
Step 5
After you have completed Steps 1 and 2 and/or Steps 3
and 4, complete Worksheet V to determine what entries
you must make on Form 8962, lines 12 through 23, for
your pre-marriage months.
Step 6
Complete Form 8962, lines 35 and 36, using the following
instructions. Follow these instructions only if you checked
the “Yes” box on Worksheet V, line 14.
Line 35.
• Column (a): Enter the family size from Worksheet I,
line 1.
• Column (b): Enter the amount from Worksheet I,
line 7.
• Column (c): Enter the month from Worksheet I, line 8.
• Column (d): Enter the month from Worksheet I, line 9.
Line 36.
• Column (a): Enter the family size from Worksheet III,
line 1.
• Column (b): Enter the amount from Worksheet III,
line 7.
• Column (c): Enter the month from Worksheet III,
line 8.
• Column (d): Enter the month from Worksheet III,
line 9.
Page 40 Publication 974 (2021)
Step 7
Complete Form 8962, lines 12 through 23, columns (a)
through (f), using the following instructions. Follow these
instructions only if you checked the “Yes” box on Work-
sheet V, line 14.
Column (a). Enter the amounts from column (a) of Work-
sheet 3 in the Form 8962 instructions.
Column (b). Enter the amounts from column (b) of Work-
sheet 3 in the Form 8962 instructions.
Column (c). For pre-marriage months, enter the totals of
Worksheet II, column C, and Worksheet IV, column C. For
example, if you entered $200 on Worksheet II, column C,
lines 1 through 5, and you entered $250 on Worksheet IV,
column C, lines 3 through 5, enter $200 on lines 12 and
13, and $450 on lines 14 through 16 of Form 8962, col-
umn (c).
For the months you were married for the entire month,
enter the amount from Form 8962, line 8b.
Column (d). Subtract column (c) from column (b) and
enter the result. If zero or less, enter -0-.
Column (e). For your pre-marriage months, enter the
amounts from lines 1 through 12, column A, of Worksheet
V in the boxes for the corresponding months in column
(e).
For the months you were married for the entire month,
enter the smaller of column (a) or (d).
Column (f). Enter the amounts from column (f) of Work-
sheet 3 in the Form 8962 instructions.
Step 8
Continue to Form 8962, line 24, and complete the rest of
the form.
Line 26. Enter -0-.
Lines 27 through 29. If line 24 is less than line 25, com-
plete these lines. Otherwise, leave these lines blank.
Publication 974 (2021) Page 41
Worksheet I. Your Alternative Monthly Contribution Amount Keep for Your Records
1. Alternative family size: Enter the total number of individuals in your alternative family size
(discussed earlier) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. One-half of household income: Divide Form 8962, line 3, by 2. Round to the nearest whole dollar
amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Alternative federal poverty line: Enter the federal poverty line amount as determined by your
alternative family size on line 1 above and the federal poverty table you used on Form 8962,
line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Alternative household income as a percentage of federal poverty line: Enter the amount from the
worksheet under Step 1.
Continue to Step 3 if you checked the “Yes” box in question 3 in Table A. Otherwise, if you did not
complete Part IV of Form 8962, check the “No” box on line 9 of Form 8962 and continue to line 10. If
you completed Part IV of Form 8962, check the “No” box on line 10, and see Lines 12 Through
23—Monthly Calculation in the Instructions for Form 8962 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Alternative applicable figure: Using your line 4 percentage, locate your applicable figure on Table 2
in the Instructions for Form 8962 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Multiply line 2 by line 5 and enter the result rounded to the nearest whole dollar amount . . . . . . . . . 6.
7. Alternative monthly contribution amount: Divide line 6 by 12 and enter the result rounded to the
nearest whole dollar amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Alternative start month: Enter the first full month you or any individual included in your alternative
family size on line 1 had coverage under a qualified health plan. For example, enter “02” if you were
enrolled in a qualified health plan with coverage effective on February 1 . . . . . . . . . . . . . . . . . . . . . . 8.
9. Alternative stop month: Enter the last month you or any individual included in your alternative family
size on line 1 had coverage under a qualified health plan or the month in which you got married,
whichever is earlier. For example, enter “09” if you had coverage under a qualified health plan for
all of 2021 and you got married on September 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Worksheet II. Your Alternative Monthly Credit Amounts for
Pre-Marriage Months Keep for Your Records
Complete this worksheet only for months beginning with the month on line 8 of Worksheet I and ending with the month
on line 9 of Worksheet I. For example, if you entered “02” on Worksheet I, line 8, and “10” on Worksheet I, line 9, com-
plete only lines 2 through 10 of this worksheet.
Monthly
Calculation
A. Form(s) 1095-A,
lines 21–32,
column A*
B. Form(s) 1095-A,
lines 21–32,
column B*
C. Worksheet I,
line 7
D. Subtract C from
B (If zero or less,
enter -0-.)
E. Smaller of
column A or
column D
1 January
2 February
3 March
4 April
5 May
6 June
7 July
8 August
9 September
10 October
11 November
12 December
* See Step 2, earlier, for instructions on the Form 1095-A amounts to report on this worksheet.
After completing this worksheet: Continue to Step 3 if you checked the “Yes” box in question 3 in Table A. Otherwise, go to Step
5.
Page 42 Publication 974 (2021)
Worksheet III. Your Spouse's Alternative Monthly
Contribution Amount Keep for Your Records
1. Alternative family size: Enter the total number of individuals in your spouse's alternative family size
(discussed earlier) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. One-half of household income: Divide Form 8962, line 3, by 2. Round to the nearest whole dollar
amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Alternative federal poverty line: Enter the federal poverty line amount as determined by your
spouse's alternative family size on line 1 above and the federal poverty table you used on Form
8962, line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Alternative household income as a percentage of federal poverty line: Enter the amount from the
worksheet under Step 3. If you completed Step 2, continue to Step 5. If you did not complete Step 2
and you did not complete Part IV of Form 8962, check the “No” box on line 9 of Form 8962 and
continue to line 10. If you did not complete Step 2 and you completed Part IV of Form 8962, check
the “No” box on line 10, and see Lines 12 Through 23—Monthly Calculation in the Instructions for
Form 8962 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Alternative applicable figure: Using your line 4 percentage, locate your applicable figure on Table 2
in the Instructions for Form 8962 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Multiply line 2 by line 5 and enter the result rounded to the nearest whole dollar amount . . . . . . . . . . 6.
7. Alternative monthly contribution amount: Divide line 6 by 12 and enter the result rounded to the
nearest whole dollar amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Alternative start month: Enter the first full month your spouse or any individual included in your
spouse's alternative family size on line 1 had coverage under a qualified health plan. For example,
enter “05” if your spouse was enrolled in a qualified health plan with coverage effective on May 1 . . . 8.
9. Alternative stop month: Enter the last month your spouse or any individual included in your spouse's
alternative family size on line 1 had coverage under a qualified health plan or the month in which
you got married, whichever is earlier. For example, enter “07” if your spouse's coverage under a
qualified health plan (and the coverage of all individuals included in your spouse's alternative family
size) terminated July 31 and you got married on September 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Worksheet IV. Your Spouse's Alternative Monthly Credit
Amounts for Pre-Marriage Months Keep for Your Records
Complete this worksheet only for months beginning with the month on line 8 of Worksheet III and ending with the
month on line 9 of Worksheet III. For example, if you entered “05” on Worksheet III, line 8, and “10” on Worksheet III,
line 9, complete only lines 5 through 10 of this worksheet.
Monthly
Calculation
A. Form(s) 1095-A,
lines 21–32,
column A*
B. Form(s) 1095-A,
lines 21–32,
column B*
C. Worksheet III,
line 7
D. Subtract C from
B (If zero or less,
enter -0-.)
E. Smaller of
column A or
column D
1 January
2 February
3 March
4 April
5 May
6 June
7 July
8 August
9 September
10 October
11 November
12 December
* See Step 4, earlier, for instructions on the Form 1095-A amounts to report on this worksheet.
After completing this worksheet: Continue to Step 5.
Publication 974 (2021) Page 43
Illustrated Example of the Alternative
Calculation for Year of Marriage
The following example illustrates the alternative calcula-
tion for year of marriage for Paulette Oak and Quentin Ce-
dar.
In 2021, Paulette and Quentin were single and main-
tained separate residences until they got married on July
18.
Paulette has no dependents. She was enrolled in a
qualified health plan from January 1 through July 31. The
Marketplace sent her a Form 1095-A (shown later) show-
ing her enrollment information for this 7-month period.
Quentin has two dependent children. He and his two
children were enrolled in a qualified health plan from Jan-
uary 1 through July 31. The Marketplace sent him a Form
1095-A (shown later) showing his enrollment information
for this 7-month period.
From August 1 through December 31, 2021, Paulette,
Quentin, and Quentin’s two dependent children were en-
rolled together in a different qualified health plan. The
Marketplace sent them a Form 1095-A (shown later)
showing their enrollment information for this 5-month pe-
riod.
Paulette and Quentin first complete lines 1 through 8 of
Form 8962. Then, they read the instructions for line 9 and
complete Table 4 and Worksheet 3 in the Form 8962 in-
structions and Worksheets I through V in this publication.
Using the information in the worksheets and on Forms
1095-A, they complete lines 9 through 29, 35, and 36 of
Form 8962.
Worksheet V. Alternative Calculation for Year of Marriage
Totals Worksheet Keep for Your Records
Column A. Complete column A below only for the months you have entries in column E of Worksheet II and/or Work-
sheet IV. Leave column A blank for all other months. Add the amounts in column E of Worksheets II and IV separately for
each month and enter the total in column A below on the line for the same month.
Column B. Complete column B below for any month you have an entry in column A. For each month, enter the corre-
sponding amount from lines 1 through 12, column (e), of Worksheet 3 under Line 9 in the Instructions for Form 8962.
Monthly Calculation
A. Total alternative
premium assistance
amounts
B. Premium assistance
amounts (regular
calculation)
1 January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5 May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6 June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7 July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8 August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9 September . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10 October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11 November . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12 December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 Totals: Enter the total of column A, lines 1 through 12, and the
total of column B, lines 1 through 12 . . . . . . . . . . . . . . . . . . . . . . . . . 13
14 Is line 13, column A, more than line 13, column B?
Yes. Your alternative calculation reduces your excess APTC. If you did not complete Part IV of Form 8962, check the “Yes”
box on line 9. Also check the “No” box on line 10. Continue to Steps 6, 7, and 8, earlier.
No. The alternative calculation does not reduce your excess APTC. Leave Form 8962, Part V, blank.
• If you did not complete Part IV of Form 8962, check the “No” box on line 9 and continue to Form 8962, line 10. If you are
required to use lines 12 through 23 of Form 8962, enter the amounts from lines 1 through 12 of Worksheet 3 in the Form
8962 instructions on the lines for the corresponding months and columns on Form 8962.
• If you completed Part IV of Form 8962, check the “No” box on line 10. Enter the amounts from lines 1 through 12 of
Worksheet 3 in the Form 8962 instructions on the lines for the corresponding months and columns on Form 8962, lines 12
through 23.
Page 44 Publication 974 (2021)
Paulette and Quentin's Form 8962, Lines 1
Through 11
Paulette and Quentin fill out Form 8962, lines 1 through
11, as follows.
Line 1. They enter “4” because this is the number of indi-
viduals they included in their tax family.
Line 2a. They enter $98,000, which they figured using
Worksheet 1-1 (not illustrated) in the Form 8962 instruc-
tions.
Line 2b. They leave line 2b blank because neither of
Quentin’s dependent children is required to file a federal
income tax return.
Line 3. They enter $98,000, the sum of lines 2a and 2b.
Line 4. They enter $26,200 from Table 1-1 in the Form
8962 instructions. This is the federal poverty line for a
family size of 4. They also check box c on line 4.
Line 5. Using Worksheet 2 in the Form 8962 instructions,
they divide line 3 ($98,000) by line 4 ($26,200) to get
374%.
Line 7. They enter their applicable figure of 0.0785 from
Table 2 in the Instructions for Form 8962. According to the
fourth column of Table 2, 0.0785 is the applicable figure if
the amount on line 5 is 374%.
Line 8a. They multiply line 3 ($98,000) by line 7 (0.0785)
and enter the result, $7,693.
Line 8b. They divide line 8a ($7,693) by 12 and enter the
result, $641.
Line 9. Paulette and Quentin read the instructions for
line 9, which explain that because they got married in
2021, they may be eligible to complete Part V to elect the
alternative calculation for year of marriage. This calcula-
tion may reduce the amount of excess APTC they would
otherwise have to repay.
The preliminary steps in determining whether they may
be eligible is to complete Table 4 and Worksheet 3 in the
Form 8962 instructions. (Both the table and worksheet for
Paulette and Quentin are shown later.) Worksheet 3
shows that if Paulette and Quentin do not elect the alter-
native calculation, their total PTC will be $7,005 (line 13,
column (e)). The excess APTC they will have to pay with
their tax return is $1,102, which is the difference between
$8,107 (APTC for the year on line 13, column (f)) and
$7,005.
Because Paulette and Quentin checked the “Yes” box
on line 14 of Worksheet 3, they complete Worksheets I
through V in this publication to determine if the alternative
calculation for year of marriage will benefit them. They
complete Worksheets I through V before they check any
of the boxes on line 9. As explained under Step 5 (Work-
sheet V), later, they qualify for the alternative calculation
for year of marriage and check “Yes” on line 9.
Line 10. As explained under Step 5 (Worksheet V), later,
they check “No” on line 10.
Line 11. Because Paulette and Quentin checked “No” on
line 10, they skip line 11 and complete lines 12 through 23
to figure their monthly PTC.
Step 1 (Paulette's Worksheet I)
Line 1. They enter “1” as Paulette’s alternative family size
because she can include only herself. She can’t include
either of Quentin’s children in her alternative family size
because neither of them lived with her for more than half
of 2021 and she could not claim them as dependents.
Lines 2 through 9. They complete these lines according
to the instructions on the worksheet.
Step 2 (Paulette's Worksheet II)
They complete Worksheet II only for January through July
(the month Paulette and Quentin got married). They com-
plete columns A and B using the amounts shown on Pau-
lette’s Form 1095-A. They complete columns C and D ac-
cording to the instructions shown on the worksheet.
Step 3 (Quentin's Worksheet III)
Line 1. They enter “3” as Quentin's alternative family size
consisting of Quentin and his two dependent children.
Lines 2 through 9. They complete these lines according
to the instructions on the worksheet.
Step 4 (Quentin's Worksheet IV)
They complete Worksheet IV only for January through
July (the month Paulette and Quentin got married). They
complete columns A and B using the amounts shown on
Quentin’s Form 1095-A. They complete columns C and D
according to the instructions shown on the worksheet.
Step 5 (Worksheet V)
Quentin and Paulette complete Worksheet V only for the
months they have entries in column E of Worksheets II
and IV (January through July). They qualify for the alterna-
tive calculation for year of marriage because line 13, col-
umn A ($5,677), is more than line 13, column B ($4,375).
Accordingly, they check “Yes” on line 14. They also check
“Yes” on Form 8962, line 9; check “No” on line 10; and
continue to Steps 6, 7, and 8 in this publication.
Step 6
Paulette and Quentin complete lines 35 and 36 as ex-
plained below.
Line 35.
• Column (a): They enter Paulette's alternative family
size from Worksheet I, line 1.
Publication 974 (2021) Page 45
• Column (b): They enter Paulette's alternative monthly
contribution amount from Worksheet I, line 7.
• Column (c): They enter the alternative start month
from Worksheet I, line 8.
• Column (d): They enter the alternative stop month
from Worksheet I, line 9.
Line 36.
• Column (a): They enter Quentin's alternative family
size from Worksheet III, line 1.
• Column (b): They enter Quentin's alternative monthly
contribution amount from Worksheet III, line 7.
• Column (c): They enter the alternative start month
from Worksheet III, line 8.
• Column (d): They enter the alternative stop month
from Worksheet III, line 9.
Step 7
Paulette and Quentin complete lines 12 through 23 as
explained below.
Column (a). They enter the amounts from column (a) of
Worksheet 3 (shown later).
Column (b). They enter the amounts from column (b) of
Worksheet 3.
Column (c). On lines 12 through 18, they enter the
monthly totals of Worksheet II, column C, and Worksheet
IV, column C. On lines 19 through 23, they enter the
amount from Form 8962, line 8b.
Column (d). They enter the difference between columns
(c) and (b).
Column (e). On lines 12 through 18, they enter the
monthly amounts from column A of Worksheet V. On lines
19 through 23, they enter the smaller of column (a) or (d).
Column (f). They enter the amounts from column (f) of
Worksheet 3.
Step 8
Paulette and Quentin complete lines 24 through 29 as ex-
plained below.
Line 24. They add the amounts on lines 12(e) through
23(e) and enter the total, $8,307. (As explained earlier un-
der Line 9, their total PTC would be only $7,005 if they did
not elect the alternative calculation.)
Line 25. They add the amounts on lines 12(f) through
23(f) and enter the total, $8,423.
Line 26. According to Step 8, they enter -0- because they
elected the alternative calculation for year of marriage.
Line 27. They subtract line 24 from line 25 and enter the
difference, $116.
Line 28. They enter the repayment limitation of $2,700
from Table 5 in the Form 8962 instructions.
Line 29. They enter $116. This is the smaller of line 27 or
line 28. They also enter $116 on Schedule 2 (Form 1040),
line 2 (non illustrated). (As explained earlier under Line 9,
the excess APTC they would have to pay would be $1,102
if they did not elect the alternative calculation.)
Page 46 Publication 974 (2021)
Form 8962
Department of the Treasury
Internal Revenue Service
Premium Tax Credit (PTC)
Attach to Form 1040, 1040-SR, or 1040-NR.
Go to www.irs.gov/Form8962 for instructions and the latest information.
OMB No. 1545-0074
2021Attachment
Sequence No. 73
Name shown on your return Your social security number
A. If you, or your spouse (if filing a joint return), received, or were approved to receive, unemployment compensation for any week beginning during 2021,
check the box. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. You cannot take the PTC if your filing status is married filing separately unless you qualify for an exception. See instructions. If you qualify, check the box
Part I Annual and Monthly Contribution Amount
1 Tax family size. Enter your tax family size. See instructions . . . . . . . . . . . . . . . . . 1
2a Modified AGI. Enter your modified AGI. See instructions . . . . . . . . . 2a
b Enter the total of your dependents’ modified AGI. See instructions . . . . . . 2b
3 Household income. Add the amounts on lines 2a and 2b. See instructions . . . . . . . . . . . . 3
4 Federal poverty line. Enter the federal poverty line amount from Table 1-1, 1-2, or 1-3. See instructions. Check the
appropriate box for the federal poverty table used. a Alaska b Hawaii c Other 48 states and DC 4
5 Household income as a percentage of federal poverty line (see instructions) . . . . . . . . . . . . 5 %
6 Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 Applicable figure. Using your line 5 percentage, locate your “applicable figure” on the table in the instructions . . 7
8a Annual contribution amount. Multiply line 3 by
line 7. Round to nearest whole dollar amount 8a
b Monthly contribution amount. Divide line 8a
by 12. Round to nearest whole dollar amount 8b
Part II Premium Tax Credit Claim and Reconciliation of Advance Payment of Premium Tax Credit
9 Are you allocating policy amounts with another taxpayer or do you want to use the alternative calculation for year of marriage? See instructions.
Yes. Skip to Part IV, Allocation of Policy Amounts, or Part V, Alternative Calculation for Year of Marriage. No. Continue to line 10.
10 See the instructions to determine if you can use line 11 or must complete lines 12 through 23.
Yes. Continue to line 11. Compute your annual PTC. Then skip lines 12–23
and continue to line 24.
No. Continue to lines 12–23. Compute
your monthly PTC and continue to line 24.
Annual
Calculation
(a) Annual enrollment
premiums (Form(s)
1095-A, line 33A)
(b) Annual applicable
SLCSP premium
(Form(s) 1095-A,
line 33B)
(c) Annual
contribution amount
(line 8a)
(d) Annual maximum
premium assistance
(subtract (c) from (b); if
zero or less, enter -0-)
(e) Annual premium tax
credit allowed
(smaller of (a) or (d))
(f) Annual advance
payment of PTC (Form(s)
1095-A, line 33C)
11 Annual Totals
Monthly
Calculation
(a) Monthly enrollment
premiums (Form(s)
1095-A, lines 21–32,
column A)
(b) Monthly applicable
SLCSP premium
(Form(s) 1095-A, lines
21–32, column B)
(c) Monthly
contribution amount
(amount from line 8b
or alternative marriage
monthly calculation)
(d) Monthly maximum
premium assistance
(subtract (c) from (b); if
zero or less, enter -0-)
(e) Monthly premium tax
credit allowed
(smaller of (a) or (d))
(f) Monthly advance
payment of PTC (Form(s)
1095-A, lines 21–32,
column C)
12 January
13 February
14 March
15 April
16 May
17 June
18 July
19 August
20 September
21 October
22 November
23 December
24 Total premium tax credit. Enter the amount from line 11(e) or add lines 12(e) through 23(e) and enter the total here 24
25 Advance payment of PTC. Enter the amount from line 11(f) or add lines 12(f) through 23(f) and enter the total here 25
26 Net premium tax credit. If line 24 is greater than line 25, subtract line 25 from line 24. Enter the difference here and
on Schedule 3 (Form 1040), line 9. If line 24 equals line 25, enter -0-. Stop here. If line 25 is greater than line 24,
leave this line blank and continue to line 27 . . . . . . . . . . . . . . . . . . . . . 26
Part III Repayment of Excess Advance Payment of the Premium Tax Credit
27 Excess advance payment of PTC. If line 25 is greater than line 24, subtract line 24 from line 25. Enter the difference here 27
28 Repayment limitation (see instructions) . . . . . . . . . . . . . . . . . . . . . . 28
29 Excess advance premium tax credit repayment. Enter the smaller of line 27 or line 28 here and on Schedule 2
(Form 1040), line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 37784Z Form 8962 (2021)
Paulee & Quentin Cedar 000-00-4230
98,000
98,000
26,200
0.0785
6417,693
1,500 1,266 455 794
8,307
8,423
1,500 1,266 455 794
1,500 1,266 455 794
1,500 1,266 455 794
1,500 1,266 455 794
1,500 1,266 455 794
1,500 1,266 455 794
1,350 1,167 641 573
1,350 1,167 641 573
1,350 1,167 641 573
1,350 1,167 641 573
1,350 1,167 641
526 573
2,700
x
x
xPublication 974 (2021) Page 47
Form 8962 (2021) Page 2
Part IV Allocation of Policy Amounts
Complete the following information for up to four policy amount allocations. See instructions for allocation details.
Allocation 1
30 (a) Policy Number (Form 1095-A, line 2) (b) SSN of other taxpayer (c) Allocation start month (d) Allocation stop month
Allocation percentage
applied to monthly
amounts
(e) Premium Percentage (f) SLCSP Percentage (g) Advance Payment of the PTC
Percentage
Allocation 2
31 (a) Policy Number (Form 1095-A, line 2) (b) SSN of other taxpayer (c) Allocation start month (d) Allocation stop month
Allocation percentage
applied to monthly
amounts
(e) Premium Percentage (f) SLCSP Percentage (g) Advance Payment of the PTC
Percentage
Allocation 3
32 (a) Policy Number (Form 1095-A, line 2) (b) SSN of other taxpayer (c) Allocation start month (d) Allocation stop month
Allocation percentage
applied to monthly
amounts
(e) Premium Percentage (f) SLCSP Percentage (g) Advance Payment of the PTC
Percentage
Allocation 4
33 (a) Policy Number (Form 1095-A, line 2) (b) SSN of other taxpayer (c) Allocation start month (d) Allocation stop month
Allocation percentage
applied to monthly
amounts
(e) Premium Percentage (f) SLCSP Percentage (g) Advance Payment of the PTC
Percentage
34 Have you completed all policy amount allocations?
Yes. Multiply the amounts on Form 1095-A by the allocation percentages entered by policy. Add all allocated policy amounts and non-
allocated policy amounts from Forms 1095-A, if any, to compute a combined total for each month. Enter the combined total for each month on
lines 12–23, columns (a), (b), and (f). Compute the amounts for lines 12–23, columns (c)–(e), and continue to line 24.
No. See the instructions to report additional policy amount allocations.
Part V Alternative Calculation for Year of Marriage
Complete line(s) 35 and/or 36 to elect the alternative calculation for year of marriage. For eligibility to make the election, see the instructions for line 9.
To complete line(s) 35 and/or 36 and compute the amounts for lines 12–23, see the instructions for this Part V.
35 Alternative entries
for your SSN
(a) Alternative family size (b) Alternative monthly
contribution amount
(c) Alternative start month (d) Alternative stop month
36 Alternative entries
for your spouse’s
SSN
(a) Alternative family size (b) Alternative monthly
contribution amount
(c) Alternative start month (d) Alternative stop month
Form 8962 (2021)
1 331 01 07
3 124 01 07Page 48 Publication 974 (2021)
Table 4 for Paulette and Quentin. Alternative Calculation for Year of Marriage Eligibility
Answer questions 1-5 below to determine whether you may be eligible to elect the alternative calculation for year of marriage.
1 Were you and your spouse each unmarried on January 1, 2021?
Yes. Continue to the next question in this table.
No. You are not eligible to elect the alternative calculation. Do not complete Part V. If you did not complete Part IV, check the “No” box on line 9
and continue to line 10. If you completed Part IV, check the “No” box on line 10, skip line 11, and continue to Lines 12 Through 23—Monthly Calculation,
later.
2 Were you married on December 31, 2021?
Yes. Continue to the next question in this table.
No. You are not eligible to elect the alternative calculation. Do not complete Part V. If you did not complete Part IV, check the “No” box on line 9
and continue to line 10. If you completed Part IV, check the “No” box on line 10, skip line 11, and continue to Lines 12 Through 23—Monthly Calculation,
later.
3 Are you filing a joint return with your spouse for 2021?
Yes. Continue to the next question in this table.
No. You are not eligible to elect the alternative calculation. Do not complete Part V. If you did not complete Part IV, check the “No” box on line 9
and continue to line 10. If you completed Part IV, check the “No” box on line 10, skip line 11, and continue to Lines 12 Through 23—Monthly Calculation,
later.
4 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.)
Yes. Continue to the next question in this table.
No. You are not eligible to elect the alternative calculation. Do not complete Part V. If you did not complete Part IV, check the “No” box on line 9
and continue to line 10. If you completed Part IV, check the “No” box on line 10, skip line 11, and continue to Lines 12 Through 23—Monthly Calculation,
later.
5 Was APTC paid for anyone in your tax family during 2021?
Yes. You are eligible to elect the alternative calculation for year of marriage if excess APTC was paid during 2021.
• Continue to Worksheet 3 next to determine whether excess APTC was paid during 2021.
• Also, see Alternative Calculation for Year of Marriage in Pub. 974 to determine if electing the alternative calculation reduces your repayment
amount.
No. You are not eligible to elect the alternative calculation. Do not complete Part V. If you did not complete Part IV, check the “No” box on line 9 and
continue to line 10. If you completed Part IV, check the “No” box on line 10, skip line 11, and continue to Lines 12 Through 23—Monthly Calculation, later.
x
x
x
x
xPublication 974 (2021) Page 49
Monthly
Calculation
If you checked the “Yes” box on line 5 of Table 4 complete this worksheet to determine whether you received excess APTC in 2021.
If Part IV—Shared Policy Allocation applies to you, do not complete this worksheet until you have completed Part IV.
Worksheet 3 for Paulette and Quentin. Alternative Calculation for Marriage Eligibility
(a) Form(s) 1095-A,
lines 21-32, column
A*
(b) Form(s) 1095-A,
lines 21-32, column
B**
(c) Form 8962,
line 8b
(d) Subtract column
(c) from column (b)
(e) Smaller of
column (a) or
column (d)
(f) Form(s) 1095-A,
lines 21-32, column
C***
1 January 1500
1500
1500
1500
1500
1500
1500
1350
1350
1350
1350
1350
1266
1266
1266
1266
1266
1266
1266
1167
1167
1167
1167
1167
8423
2 February
3 March
4 April
5 May
6 June
7 July
8 August
9 September
10 October
11 November
12 December
13 Totals: Enter the total of column (e), lines 1-12, and the total of column (f), lines 1-12 . . . . . . . . . . 7005
14 Is line 13, column (e), less than line 13, column (f)?
Yes. Excess APTC was paid in 2021. You are eligible to elect the alternative calculation. See Alternative Calculation for Year of Marriage in Pub. 974 to
determine if electing the alternative calculation reduces your repayment amount.
No. There was no excess APTC paid in 2021. You are not eligible to elect the alternative calculation. Do not complete Part V.
• If you did not complete Part IV, check the “No” box on line 9 and continue to line 10. If you are required to use lines 12 through 23 of Form 8962, enter the
amounts from lines 1 through 12 of this worksheet in the lines for the corresponding months and columns on Form 8962.
• If you completed Part IV, check the “No” box on line 10, skip line 11, and enter the amounts from lines 1 through 12 of this worksheet in the lines for the
corresponding months and columns of lines 12 through 23 of Form 8962.
* See Column (a) under Lines 12 Through 23—Monthly Calculation, later, for instructions for the amounts to enter on lines 1 through 12, column (a), of this worksheet.
These are the amounts of the monthly premiums reported on Form(s) 1095-A, lines 21 through 32, column A.
** See Column (b) under Lines 12 Through 23—Monthly Calculation, later, for instructions for the amounts to enter on lines 1 through 12, column (b), of this worksheet.
These are the amounts of the monthly premium for the applicable SLCSP reported on Form(s) 1095-A, lines 21 through 32, column B.
*** See Column (f) under Lines 12 Through 23—Monthly Calculation, later, for instructions for the amounts to enter on lines 1 through 12, column (f), of this worksheet.
These are the amounts of the monthly APTC reported on Form(s) 1095-A, lines 21 through 32, column C.
X
▲!
CAUTIONPage 50 Publication 974 (2021)
Paulette’s Worksheet I. Your Alternative Monthly Contribution Amount
Paulette’s Worksheet II. Your Alternative Monthly Credit Amounts for Pre-Marriage Months
49,000
12,760
0.0810
3,969
Note. Complete this worksheet only for months beginning with the month on line 8 of Worksheet I and ending with the month on
line 9 of Worksheet I. For example, if you entered “02” on Worksheet I, line 8, and “10” on Worksheet I, line 9, complete only lines
2 through 10 of this worksheet.
*See Step 2, earlier, for instructions on the Form 1095-A amounts to report on this worksheet.
After completing this worksheet: Continue to Step 3 if you checked the “Yes” box in question 3 in Table A. Otherwise, go to
Step 5.
Alternative household income as a percentage of federal poverty line: Enter the amount from the
worksheet under Step 1.
Alternative federal poverty line: Enter the federal poverty line amount as determined by your
alternative family size on line 1 above and the federal poverty table you used on Form 8962,
Alternative stop month: Enter the last month you or any individual included in your alternative family
size on line 1 had coverage under a qualified health plan or the month in which you got married,
whichever is earlier. For example, enter “09” if you had coverage under a qualified health plan for
all of 2021 and you got married on September 5
Continue to Step 3 if you checked the “Yes” box in question 3 in Table A. Otherwise, if you did not
complete Part IV of Form 8962, check the “No” box on line 9 of Form 8962 and continue to line 10.
If you completed Part IV of Form 8962, check the “No” box on line 10, and see Lines 12 through
23—Monthly Calculation in the Instructions for Form 8962Publication 974 (2021) Page 51
Quentin’s Worksheet III. Your Spouse’s Alternative Monthly Contribution Amount
Quentin’s Worksheet IV. Your Spouse’s Alternative Monthly Credit Amounts for Pre-Marriage Months
49,000
21,720
0.0304
1,490
1,000
1,000
1,000
1,000
1,000
1,000
1,000
*See Step 4, earlier, for instructions on the Form 1095-A amounts to report on this worksheet.
After completing this worksheet: Continue to Step 5.
Note. Complete this worksheet only for months beginning with the month on line 8 of Worksheet III and ending with the month on
line 9 of Worksheet III. For example, if you entered “05” on Worksheet III, line 8, and “10” on Worksheet III, line 9, complete only
lines 5 through 10 of this worksheet.
Alternative federal poverty line: Enter the federal poverty line amount as determined by your
spouse’s alternative family size on line 1 above and the federal poverty table you used on Form
8962, line 4
Alternative household income as a percentage of federal poverty line: Enter the amount from the
worksheet under Step 3. If you completed Step 2, continue to Step 5. If you did not complete
Step 2 and you did not complete Part IV of form 8962, check the “No” box on line 9 of Form
8962 and continue to line 10. If you did not complete Step 2 and you completed Part IV of Form
8962, check the “No” box on line 10, and see Lines 12 through 23—Monthly Calculation in the
Instructions for Form 8962Page 52 Publication 974 (2021)
Worksheet V for Paulette and Quentin. Alternative Calculation for Year of Marriage Totals Worksheet
811 625
811 625
811 625
811 625
811 625
811 625
811 625
5,677 4,375
XPublication 974 (2021) Page 53
Form 1095-A
2021Department of the Treasury
Internal Revenue Service
Health Insurance Marketplace Statement
Do not attach to your tax return. Keep for your records.
Go to www.irs.gov/Form1095A for instructions and the latest information.
OMB No. 1545-2232VOID
CORRECTED
Part I Recipient Information
1 Marketplace identifier 2 Marketplace-assigned policy number 3 Policy issuer’s name
4 Recipient’s name 5 Recipient’s SSN 6 Recipient’s date of birth
7 Recipient’s spouse’s name 8 Recipient’s spouse’s SSN 9 Recipient’s spouse’s date of birth
10 Policy start date 11 Policy termination date 12 Street address (including apartment no.)
13 City or town 14 State or province 15 Country and ZIP or foreign postal code
Part II Covered Individuals
A. Covered individual name B. Covered individual SSN C. Covered individual
date of birth
D. Coverage start date E. Coverage termination date
Part III Coverage Information
Month A. Monthly enrollment premiums B. Monthly second lowest cost silver
plan (SLCSP) premium
C. Monthly advance payment of
premium tax credit
21 January
22 February
23 March
24 April
25 May
26 June
27 July
28 August
29 September
30 October
31 November
32 December
33 Annual Totals
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 60703Q Form 1095-A (2021)
1,350 1,167 573
Paulee Oak xxx-xx-4230
Quentin Cedar xxx-xx-9221
Paulee Oak xxx-xx-4230
Quentin Cedar xxx-xx-9221
Ron Cedar xxx-xx-3606
John Cedar xxx-xx-7518
MD 5436789F VWX Insurance Co.
08/01/21 12/31/21 2002 Grand Blvd
Bonville MD 20000
08/01/21 12/31/21
08/01/21 12/31/21
08/01/21 12/31/21
08/01/21 12/31/21
1,350 1,167 573
1,350 1,167 573
1,350 1,167 573
1,350 1,167 573
6,750 5,835 2,865Page 54 Publication 974 (2021)
Form 1095-A
2021Department of the Treasury
Internal Revenue Service
Health Insurance Marketplace Statement
Do not attach to your tax return. Keep for your records.
Go to www.irs.gov/Form1095A for instructions and the latest information.
OMB No. 1545-2232VOID
CORRECTED
Part I Recipient Information
1 Marketplace identifier 2 Marketplace-assigned policy number 3 Policy issuer’s name
4 Recipient’s name 5 Recipient’s SSN 6 Recipient’s date of birth
7 Recipient’s spouse’s name 8 Recipient’s spouse’s SSN 9 Recipient’s spouse’s date of birth
10 Policy start date 11 Policy termination date 12 Street address (including apartment no.)
13 City or town 14 State or province 15 Country and ZIP or foreign postal code
Part II Covered Individuals
A. Covered individual name B. Covered individual SSN C. Covered individual
date of birth
D. Coverage start date E. Coverage termination date
Part III Coverage Information
Month A. Monthly enrollment premiums B. Monthly second lowest cost silver
plan (SLCSP) premium
C. Monthly advance payment of
premium tax credit
21 January
22 February
23 March
24 April
25 May
26 June
27 July
28 August
29 September
30 October
31 November
32 December
33 Annual Totals
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 60703Q Form 1095-A (2021)
500 433 116
Paulee Oak xxx-xx-4230
Paulee Oak xxx-xx-4230
MD 8765432019 VWX Insurance Co.
01/01/21 07/31/21 1001 Main St
Bonville MD 20000
01/01/21 07/31/21
500 433 116
500 433 116
500 433 116
500 433 116
3,500 3,031 812
500 433 116
500 433 116Publication 974 (2021) Page 55
Form 1095-A
2021Department of the Treasury
Internal Revenue Service
Health Insurance Marketplace Statement
Do not attach to your tax return. Keep for your records.
Go to www.irs.gov/Form1095A for instructions and the latest information.
OMB No. 1545-2232VOID
CORRECTED
Part I Recipient Information
1 Marketplace identifier 2 Marketplace-assigned policy number 3 Policy issuer’s name
4 Recipient’s name 5 Recipient’s SSN 6 Recipient’s date of birth
7 Recipient’s spouse’s name 8 Recipient’s spouse’s SSN 9 Recipient’s spouse’s date of birth
10 Policy start date 11 Policy termination date 12 Street address (including apartment no.)
13 City or town 14 State or province 15 Country and ZIP or foreign postal code
Part II Covered Individuals
A. Covered individual name B. Covered individual SSN C. Covered individual
date of birth
D. Coverage start date E. Coverage termination date
Part III Coverage Information
Month A. Monthly enrollment premiums B. Monthly second lowest cost silver
plan (SLCSP) premium
C. Monthly advance payment of
premium tax credit
21 January
22 February
23 March
24 April
25 May
26 June
27 July
28 August
29 September
30 October
31 November
32 December
33 Annual Totals
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 60703Q Form 1095-A (2021)
xxx-xx-9221Quentin Cedar
Quentin Cedar xxx-xx-9221
Ron Cedar xxx-xx-3606
John Cedar xxx-xx-7518
MD 7654320198 BCD Insurance Co.
01/01/21 07/31/21 2002 Grand Blvd
Bonville MD 20000
01/01/21 07/31/21
01/01/21 07/31/21
01/01/21 07/31/21
4,746
1,000 833 678
1,000 833 678
1,000 833 678
1,000 833 678
1,000 833 678
1,000 833 678
1,000 833 678
7,000 5,831Page 56 Publication 974 (2021)
Self-Employed Health
Insurance Deduction and PTC
This part provides special instructions for figuring the
self-employed health insurance deduction and PTC if you
or your spouse was self-employed, you or a member of
your tax family was enrolled in a qualified health plan in
2021, and you may be eligible for the PTC. Because the
amount of the self-employed health insurance deduction
may affect the amount of the PTC, and the amount of the
PTC may affect the amount of the deduction, a taxpayer
who may be eligible for both may have difficulty determin-
ing the amounts of those items. A taxpayer who may be
eligible for both may follow the instructions in this part to
determine amounts of the self-employed health insurance
deduction and PTC that are allowable under the law.
Using the special instructions in this part is op-
tional. If you are eligible for both a self-employed
health insurance deduction and the PTC for the
same premiums, you may use any computation method
that results in reporting amounts that satisfy the rules for
both the deduction and PTC, as long as the sum of the de-
duction claimed for the premiums and the PTC computed,
taking the deduction into account, is less than or equal to
the enrollment premiums.
Before you complete any of the worksheets in this part,
you should first do the following.
• Read the instructions for line 17 of Schedule 1 (Form
1040) to find out if you meet the requirements for
claiming the self-employed health insurance deduc-
tion.
• Read the Instructions for Form 8962 to find out if you
meet the requirements for claiming the PTC except for
the requirement that your household income be at
least 100% of the federal poverty line for your family
size for 2021. You will determine whether you meet
the 100% requirement in the process of completing
these instructions.
If you meet the requirements described above, do the
following.
• If you are filing Schedule 1 (Form 1040), complete
lines 18 (Penalty on early withdrawal of savings) andCAUTION
!
19a (Alimony paid). Also, figure any write-in adjust-
ments you will enter on the dotted line next to line 26.
• Complete line 20 of Schedule 1 (Form 1040) if you
made contributions to a traditional IRA and you (and
your spouse if filing a joint return) were not covered by
a retirement plan at work or through self-employment.
• If you elect to report your child’s interest and divi-
dends on your tax return, complete Form 8814.
• If, during 2021, you were an eligible trade adjustment
assistance (TAA) recipient, alternative TAA recipient,
reemployment TAA recipient, or Pension Benefit
Guaranty Corporation payee, read the Instructions for
Form 8885 to find out if you meet the requirements for
electing the HCTC. If you elect the HCTC, complete
Form 8885.
Using this information, do the following.
1. If you have health insurance premiums for which you
cannot claim the PTC (see Nonspecified premiums,
later), first complete Worksheet P or, if required,
Worksheet 6-A in chapter 6 of Pub. 535 but only with
respect to those premiums. Skip Worksheets W and
X if either of the following applies.
a. You completed Worksheet P and line 2 is less
than or equal to line 1.
b. You completed Worksheet 6-A in chapter 6 of
Pub. 535 and line 13 is equal to or less than line 3.
2. Then, complete Worksheet W and Worksheet X. You
have to complete Worksheet X only if APTC was paid
to your insurer on your behalf for the months you were
self-employed. If APTC was not paid to your insurer
on your behalf for the months you were self-em-
ployed, skip Worksheet X.
3. After completing Worksheets W and X, you may
choose to use either the Simplified Calculation
Method or the Iterative Calculation Method to com-
pute your self-employed health insurance deduction
and PTC. The Simplified Calculation Method is
shorter, but in some cases will not produce a result as
favorable as the Iterative Calculation Method.
Publication 974 (2021) Page 57
Instructions for Worksheet P
Use Worksheet P to figure the amount you can deduct for
nonspecified premiums.
Exceptions. Use Worksheet 6-A in chapter 6 of Pub. 535
instead of Worksheet P to figure your deduction for non-
specified premiums if any of the following applies. (Only
include nonspecified premiums on line 1 or 2 of Work-
sheet 6-A.)
• You had more than one source of income subject to
self-employment tax.
• You file Form 2555.
• You are using amounts paid for qualified long-term
care insurance to figure the deduction.
After you complete Worksheet 6-A, follow the instruc-
tions below.
• If line 13 is equal to or less than line 3, stop here. Do
not read the rest of these special instructions. Enter
the amount from line 14 of Worksheet 6-A on line 17
of Schedule 1 (Form 1040). Use Form 8962 to figure
the PTC for specified premiums.
• If line 13 is more than line 3, complete Worksheet W.
Also complete Worksheet X if APTC was paid to your
insurer on your behalf for the months you were
self-employed. If APTC was not paid to your insurer
on your behalf for the months you were self-employed,
skip Worksheet X.
Nonspecified Premiums
A nonspecified premium is either of the following.
• A premium for health insurance coverage established
under your business (or the S corporation in which
you were a more-than-2% shareholder) but paid for
coverage in a plan that is not a qualified health plan.
• The portion of the premium for coverage in a plan that
is a qualified health plan established under your busi-
ness (or the S corporation in which you were a
more-than-2% shareholder) but that is attributable to
individuals not in your coverage family.
Calculate how much of these nonspecified premiums
are fully deductible by entering this amount on line 1 of
Worksheet P or, if required, on line 1 or 2 of Worksheet
Worksheet P. Self-Employed Health Insurance Deduction
for Nonspecified Premiums Keep for Your Records
Before you begin: If you file Form 8885, read the definition of nonspecified premiums to find out which amounts you cannot
include on line 1 of this worksheet.
Read Exceptions, later, to see if you can use this worksheet instead of Pub. 535 to figure your deduction for
nonspecified premiums. Also read the definitions of specified premiums and nonspecified premiums.
1. Enter the total amount of nonspecified premiums paid in 2021 for health insurance coverage
established under your business (or the S corporation in which you were a more-than-2%
shareholder) for 2021 for you, your spouse, and your dependents. Your insurance can also
cover your child who was under age 27 at the end of 2021, even if the child was not your
dependent. But do not include amounts for any month you were eligible to participate in an
employer-sponsored health plan or amounts paid from retirement plan distributions that were
nontaxable because you are a retired public safety officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter your net profit* and any other earned income** from the business under which the
insurance plan is established, minus any deductions on lines 15 and 16 of Schedule 1 (Form
1040). Do not include Conservation Reserve Program payments exempt from
self-employment tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Self-employed health insurance deduction for nonspecified premiums. Enter the
smaller of line 1 or line 2. Do not include this amount in figuring any medical expense
deduction on Schedule A (Form 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
• If line 2 is equal to or less than line 1, stop here. Do not read the rest of these special
instructions. Enter this amount on line 17 of Schedule 1 (Form 1040). Use Form 8962 to
figure the premium tax credit for specified premiums.
• If line 2 is more than line 1, complete Worksheet W. Also complete Worksheet X if APTC
was paid to your insurer on your behalf for the months you were self-employed. If APTC
was not paid to your insurer on your behalf for the months you were self-employed, skip
Worksheet X.
* If you used either optional method to figure your net earnings from self-employment, do not enter your net profit. Instead, enter the
amount from Schedule SE, line 4b.
** Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. However, it does
not include capital gain income. If you were a more-than-2% shareholder in the S corporation under which the insurance plan is
established, earned income is your Medicare wages (box 5 of Form W-2) from that corporation.
Page 58 Publication 974 (2021)
6-A in chapter 6 of Pub. 535. Complete the remainder of
the appropriate worksheet.
The following are examples of nonspecified premiums.
• Premiums paid for a qualified health plan other than
during a coverage month.
• Premiums paid to cover an individual other than you,
your spouse, or your dependents.
• Premiums for qualified long-term care insurance.
• Dental insurance premiums.
• Medicare premiums you voluntarily paid to obtain in-
surance in your name that is similar to qualifying
health insurance.
Example. In 2021, you were self-employed and were
enrolled in a qualified health plan through the Market-
place. You enrolled your dependent, 22-year-old daughter
in individual market coverage not offered through the Mar-
ketplace. This coverage has an annual premium of
$3,000. This $3,000 premium is a nonspecified premium
because it is for coverage under a plan that is not a quali-
fied health plan. Include this $3,000 premium on Work-
sheet P, line 1, or, if required, on line 1 of Worksheet 6-A
in chapter 6 of Pub. 535.
Filers of Form 8885. If you are filing Form 8885, non-
specified premiums do not include any of the following
amounts.
• Any amounts you included on Form 8885, line 4, or on
Form 14095 (the Health Coverage Tax Credit Reim-
bursement Request form).
• Any qualified health insurance coverage premiums
you paid for HCTC-eligible coverage months for which
you received the benefit of the HCTC advance
monthly payment program.
• Any advance monthly payments of the HCTC your
health plan administrator received from the IRS, as
shown on Form 1099-H, Health Coverage Tax Credit
(HCTC) Advance Payments.
Specified Premiums
Specified premiums are the premiums for a specified
qualified health plan or plans for which you may otherwise
claim as a self-employed health insurance deduction on
line 17 of Schedule 1 (Form 1040). Generally, these are
the premiums paid for the months you were self-em-
ployed. If you were self-employed for part of a month, the
entire premium for that month is a specified premium. A
specified qualified health plan is a qualified health plan
that covers one or more members of your coverage family
for a month for which your enrollment premium(s) has
been paid by the due date prescribed under Enrollment
premiums, earlier. Qualified health plan, coverage family,
and enrollment premiums are defined earlier under Terms
You May Need To Know.
Example. You were enrolled in a qualified health plan
through the Marketplace for all of 2021 and you were
self-employed from September 15 through December 31.
Only the premiums for the last 4 months are specified pre-
miums and only those premiums are entered on Work-
sheet W, line 1, and Worksheet X, line 27, if you are re-
quired to complete those worksheets. You are not allowed
a self-employed health insurance deduction for the Janu-
ary through August premiums because you were not
self-employed during those months. Those premiums are
neither specified premiums nor nonspecified premiums.
However, you may be allowed a PTC for your coverage
for January through August.
Plan covering individuals in another tax family. If the
plan covers at least one individual in your tax family and
one individual in another tax family, you may have to allo-
cate policy amounts between your tax family and the other
tax family. See Line 9 in the Form 8962 instructions for in-
structions on how to allocate policy amounts. Do this allo-
cation before you determine the portion of the specified
premiums allocable to your coverage family discussed
next.
Plan covering individuals not in your coverage fam-
ily. If the plan covers individuals who are not in your cov-
erage family, use only the portion of the premiums for the
specified qualified health plan that is allocable to your cov-
erage family. You determine the specified premiums that
are allocable to your coverage family by multiplying the
enrollment premiums for the months you were self-em-
ployed and the plan covered non-coverage family mem-
bers by a fraction. The numerator of the fraction is the pre-
mium for the applicable second lowest cost silver plan
(SLCSP) for your coverage family. The denominator of the
fraction is the total of (1) the premium for the applicable
SLCSP for your coverage family, and (2) the premium for
the applicable SLCSP for the individuals who are not in
your coverage family.
Example. Gary was self-employed in 2021 and enrol-
led in a qualified health plan. APTC was paid to his insurer
on his behalf. The policy covers Gary, Gary's wife Sue,
and Gary’s two dependent daughters. Sue is not in the
coverage family because she is eligible to enroll in her
employer’s health insurance. The enrollment premium is
$15,000. The premium for the applicable SLCSP covering
Gary and his two daughters is $12,000 and the premium
for the applicable SLCSP covering Sue is $6,000. Gary
figures the amount of specified premiums by multiplying
the $15,000 enrollment premium by a fraction. The numer-
ator of the fraction is the premium for his applicable
SLCSP ($12,000). The denominator of the fraction is the
total of the premiums for the applicable SLCSP of both
Gary and Sue ($18,000). The result is $10,000 ($15,000
enrollment premium x ($12,000/$18,000)) of specified
premiums, which Gary enters on Worksheet W, line 1, and
Worksheet X, line 27. The remaining $5,000 of enrollment
premium ($15,000 enrollment premium – $10,000 speci-
fied premiums) is attributable to Sue's coverage and is a
nonspecified premium that Gary enters on Worksheet P,
line 1.
Publication 974 (2021) Page 59
Filers of Form 8885. If you are filing Form 8885, speci-
fied premiums do not include any of the following
amounts.
• Any amounts you included on Form 8885, line 4, or on
Form 14095 (the Health Coverage Tax Credit Reim-
bursement Request form).
• Any qualified health insurance coverage premiums
you paid for HCTC-eligible coverage months for which
you received the benefit of the HCTC advance
monthly payment program.
• Any advance monthly payments of the HCTC your
health plan administrator received from the IRS, as
shown on Form 1099-H.
Worksheet W. Figuring the Limit on the Self-Employed
Health Insurance Deduction for Specified Premiums Keep for Your Records
Caution. If you have more than one trade or business under which a qualified health plan is established, complete lines
4 through 13 separately for each trade or business. Add the amounts on line 13 for all the trades or businesses. Then,
complete lines 14 through 17 once for all trades or businesses.
1. Enter your specified premiums. See Specified Premiums under Instructions for Worksheet
P, earlier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the APTC from Form 1095-A, Part III, column C, that is attributable to the premiums on
line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter your net profit* and any other earned income** from the business under which the qualified
health plan is established. Do not include Conservation Reserve Program payments exempt from
self-employment tax. If the business is an S corporation, skip to line 11 . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter the total of all net profits* from: Schedule C (Form 1040), line 31; Schedule F (Form 1040),
line 34; or Schedule K-1 (Form 1065), box 14, code A, plus any other income allocable to the
profitable businesses. Do not include Conservation Reserve Program payments exempt from
self-employment tax. See the Instructions for Schedule SE (Form 1040). Do not include any net
losses shown on these schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Divide line 4 by line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Multiply line 15 of Schedule 1 (Form 1040) by line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Subtract line 7 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Enter the amount, if any, from line 16 of Schedule 1 (Form 1040) attributable to the same
business for which the qualified health plan is established . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Subtract line 9 from line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Enter your Medicare wages (Form W-2, box 5) from an S corporation in which you are a
more-than-2% shareholder and in which the qualified health plan is established . . . . . . . . . . . . . . . 11.
12. Enter any amount from Form 2555, line 45, attributable to the amount entered on line 4 or line 11
above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
Note. If you are not filing Form 2555, enter -0-.
13. Subtract line 12 from line 10 or 11, whichever applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Enter your self-employed health insurance deduction for nonspecified premiums from Worksheet
P, line 3, or Worksheet 6-A, line 14, in chapter 6 of Pub. 535 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Subtract line 14 from line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Enter the smaller of line 3 or line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. Add lines 14 and 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.
18. Is line 2 blank or -0-? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
Yes. Skip line 19 and Worksheet X. Use one of the methods that follow Worksheet X to figure
the PTC and self-employed health insurance deduction for specified premiums.
No. Go to line 19.
19. Subtract line 16 from line 15. Then, go to Worksheet X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
* If you used either optional method to figure your net earnings from self-employment from any business, do not enter your net profit from the
business. Instead, enter the amount attributable to that business from Schedule SE, line 4b.
** Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. However, it does not include
capital gain income.
Page 60 Publication 974 (2021)
Instructions for Worksheet X
Line 1. If you are filing Form 8582, Passive Activity Loss
Limitations, and both lines 1d and 3 of that form are los-
ses:
• Do not complete Part II or III of that form until you are
instructed to do so later; and
• Do not include any losses from rental real estate activ-
ities on line 1.
If you are filing Form 8814, Parents’ Election To Report
Child’s Interest and Dividends, and the amount on Form
8814, line 4, is more than $1,100, you must also include
the following amounts on line 1.
• The tax-exempt interest from Form 8814, line 1b.
• The lesser of Form 8814, line 4 or line 5.
• Any nontaxable social security benefits your child re-
ceived.
If you are filing Form 8815, Exclusion of Interest From
Series EE and I U.S. Savings Bonds Issued After 1989, do
not complete the form until you are instructed to do so
later. Include on line 1 the amount from Schedule B (Form
1040), line 2.
Line 4. Include your IRA deduction on line 4 only if you
(and your spouse if filing a joint return) were not covered
by a retirement plan at work or through self-employment.
Line 25. Also enter this amount on line 28 of the Form
8962 you attach to your tax return if you are required to
complete that line and you do not complete Worksheet Y.
Do not enter an amount from Table 5 in the Form 8962 in-
structions.
Special instructions for filers of Form 8885. If you file
Form 8885, use the following instructions to complete Part
III.
Worksheet X. Figuring Household Income and the
Repayment Limitation Keep for Your Records
Complete this worksheet only if APTC was paid to your insurer on your behalf for the months you were self-employed.
Part I: Taxpayer's Modified AGI
1. Combine the amounts from:
• Form 1040, 1040-SR, or 1040-NR, lines 2a, 9, and the excess, if any, of line 6a over
line 6b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
Note. See the instructions if you are filing Form 8582, 8814, or 8815.
2. Enter any amounts from Form 2555, lines 45 and 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter the total of the amounts from:
• Schedule 1 (Form 1040), lines 11 through 16, 18, and 19a, plus any write-in adjustments
you entered on the dotted line next to Schedule 1 (Form 1040), line 26 . . . . . . . . . . . . . . . . . . 4.
Note. See the instructions if you made contributions to a traditional IRA.
5. Enter the amount from Worksheet W, line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter the amount from Worksheet W, line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Add lines 4, 5, and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Subtract line 7 from line 3. Then, go to Part II if you are claiming dependents on your tax return. If
you are not claiming any dependents on your tax return, skip Part II and go to Part III . . . . . . . . . . 8.
Part II: Dependents’ Modified AGI
Note. Use Part II to figure the combined modified AGI for the dependents you included in your tax family. Only include the modified
AGI of those dependents who are required to file a return. Do not include the modified AGI of dependents who are filing a tax return
only to claim a refund of tax withheld or estimated tax.
9. Enter the combined AGI for your dependents from Form 1040, 1040-SR, or 1040-NR,
line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Enter any tax-exempt interest for your dependents from Form 1040, 1040-SR, or 1040-NR,
line 2a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Enter any amounts for your dependents from Form 2555, lines 45 and 50 . . . . . . . . . . . . . . . . . . . 11.
12. Enter for each of your dependents the excess, if any, of Form 1040 or 1040-SR, line 6a, over
line 6b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Add lines 9 through 12. Then, go to Part III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
Continued on next page
Publication 974 (2021) Page 61
If (1) you are electing to take the HCTC on Form 8885
for at least 1 month of the year for an individual(s) who
was also enrolled in a qualified health plan offered through
the Marketplace for at least 1 other month of the year, and
(2) you did not receive the benefit of advance monthly
payments of the HCTC for that individual(s) during the
year, do the following.
• Skip lines 14 through 27.
• Enter the amount from Worksheet W, line 1, on
line 28.
• Complete lines 29 through 31 as instructed.
If you did receive the benefit of advance monthly pay-
ments of the HCTC for 1 or more months of the year for an
individual(s) who was also enrolled in a qualified health
plan offered through the Marketplace for at least 1 other
month of the year, complete Form 8885 through line 4. If
you are not instructed to complete the Excess Advance
HCTC Repayment Worksheet in the Instructions for Form
8885 or if you enter an amount on line 3 of that worksheet,
then add the amount from Form 8885, line 5, to the
amount you are instructed to enter on lines 15, 19, and 22
of Worksheet X. If you are instructed to complete the Ex-
cess Advance HCTC Repayment Worksheet and enter an
amount on line 4 of that worksheet, complete Worksheet
X using the repayment limitations provided without any
adjustments.
If you do not qualify to take the PTC (Form 8962,
line 24, is -0- or blank), do not enter the amount from
Worksheet X, line 25, on Form 8962, line 28. Instead, see
Line 28 in the Form 8962 instructions to find out what to
enter on line 28.
Worksheet X. Figuring Household Income and the
Repayment Limitation (continued) Keep for Your Records
Part III: Repayment Limitation
Note. If you are filing Form 8885, see the Instructions for Worksheet X before completing this part.
14. Household income. Add lines 8 and 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Enter the smaller of Worksheet W, line 19, or $650 ($325 if your filing status is single) . . . . . . . . . 15.
16. Subtract line 15 from line 14. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17a. Enter the number of qualifying individuals in your tax family
(including yourself) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17a.
17b. Enter the federal poverty line amount as determined by the family size on line 17a and federal
poverty Table 1-1, 1-2, or 1-3 for your state of residence during 2021 in the Form 8962
instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17b.
18. Divide line 16 by line 17b. If the result is not a whole percentage, do not round; instead, multiply
this number by 100 (to express it as a percentage) and then drop any numbers after the decimal
point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for
3.997, enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18. %
• If the result is less than 200, enter $650 ($325 if your filing status is single) on line 25. Skip
lines 19 through 24.
• If the result is 200 or more, go to line 19.
19. Enter the smaller of Worksheet W, line 19, or $1,600 ($800 if your filing status is single) . . . . . . . 19.
20. Subtract line 19 from line 14. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.
21. Divide line 20 by line 17b. If the result is not a whole percentage, do not round; instead, multiply
this number by 100 (to express it as a percentage) and then drop any numbers after the decimal
point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for
3.997, enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21. %
• If the result is less than 300, enter $1,600 ($800 if your filing status is single) on line 25. Skip
lines 22 through 24.
• If the result is 300 or more, go to line 22.
22. Enter the smaller of Worksheet W, line 19, or $2,700 ($1,350 if your filing status is single) . . . . . 22.
23. Subtract line 22 from line 14. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.
24. Divide line 23 by line 17b. If the result is not a whole percentage, do not round; instead, multiply
this number by 100 (to express it as a percentage) and then drop any numbers after the decimal
point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for
3.997, enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24. %
• If the result is less than 400, enter $2,700 ($1,350 if your filing status is single) on line 25.
• If the result is 400 or more, enter the amount from Worksheet W, line 2, on line 25.
25. Enter the amount you were instructed to enter here by line 18, 21, or 24. See instructions . . . . . . 25.
Part IV: Maximum Self-Employed Health Insurance Deduction
26. Add lines 6 and 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.
27. Enter the amount from Worksheet W, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.
28. Enter the smaller of line 26 or line 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.
29. Enter the amount from Worksheet W, line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.
30. Enter the smaller of line 28 or line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.
31. Add lines 5 and 30. Then, use one of the methods that follow to figure the PTC and the
self-employed health insurance deduction for specified premiums . . . . . . . . . . . . . . . . . . . . . . . . . 31.
Page 62 Publication 974 (2021)
Iterative Calculation Method
Follow the steps below to figure your self-employed health
insurance deduction and PTC under the Iterative Calcula-
tion Method. You do not have to use this method. You can
use the Simplified Calculation Method (discussed later) or
any computation method that satisfies each set of rules as
long as the sum of the deduction claimed for the premi-
ums and the PTC computed, taking the deduction into ac-
count, is less than or equal to the premiums.
Do not round to whole dollars when performing
the computations under this method. Instead, use
dollars and cents. This is necessary so you can
complete Step 6.
Step 1
Figure your AGI, modified AGI, and household income us-
ing Worksheet X, line 31, as your self-employed health in-
surance deduction. If you did not fill out Worksheet X, use
the amount from Worksheet W, line 17. Use Worksheets
1-1 and 1-2 in the Form 8962 instructions to figure modi-
fied AGI and household income.
If you are claiming any of the following deductions
or exclusions, see Special Instructions for
Self-Employed Individuals Who Claim Certain De-
ductions/Exclusions, later, before you complete Step 1.
1. Passive activity losses from rental real estate activi-
ties and lines 1d and 3 of Form 8582 are losses.
2. IRA deduction and you (or your spouse if filing a joint
return) were covered by a retirement plan at work or
through self-employment.
3. Exclusion of interest from series EE and I U.S. sav-
ings bonds issued after 1989.
4. Student loan interest deduction.
Step 2
Figure the total PTC on Form 8962 using the AGI, modi-
fied AGI, and household income you determined in Step
1. Enter the modified AGI and household income from
Step 1 on the Form 8962. When figuring the PTC, use all
enrollment premiums for qualified health plans in which
you or an individual in your tax family enrolled. Complete
this Form 8962 only through line 24. Do not attach this
Form 8962 to your tax return.
Cannot take the PTC. If you are not eligible to take the
PTC, stop here. Do not use this method. Instead, figure
your self-employed health insurance deduction using the
Self-Employed Health Insurance Deduction Worksheet in
the Instructions for Form 1040 or the Instructions for Form
1040-NR or, if required, Worksheet 6-A in chapter 6 of
Pub. 535. If you are following the instructions under Spe-
cial Instructions for Self-Employed Individuals Who Claim
Certain Deductions/Exclusions, later, make this determi-
nation when you complete the final iteration of Step 2. Re-CAUTION
!CAUTION
!
figure the deductions/exclusions if you are not eligible for
the PTC.
Step 3
Figure your self-employed health insurance deduction for
specified premiums by completing the following work-
sheet.
If you have more than one trade or business un-
der which you established a qualified health plan,
see More than one trade or business below be-
fore you complete the Step 3 Worksheet.
Step 3 Worksheet
Enter amounts in dollars and cents. Do not round to whole
dollars.
1. Enter the amount from Worksheet
W, line 1 . . . . . . . . . . . . . . . . . . . . . . . 1. .
Caution. If the amounts on lines 12 through
23, column (e), of your Step 2 Form 8962 are
not the same for each month and you had
specified premiums for less than 12 months,
skip lines 2 through 5 below and enter on
line 6 the total of those column (e) amounts
for the months you paid specified premiums.
2. Enter the total PTC (Form 8962, line 24) you
figured in Step 2, earlier . . . . . . . . . . . . . 2. .
3. Enter the number of months in 2021 for
which specified premiums were paid . . . . . 3.
Note. Self-employment for part of a month
counts as a full month of self-employment.
4. Enter the number of months someone in your
coverage family was enrolled in the qualified
health plan . . . . . . . . . . . . . . . . . . . . . . 4.
5. Divide line 3 by line 4 . . . . . . . . . . . . . . . 5.
6. Multiply line 5 by line 2 . . . . . . . . . . . . . . 6. .
7. Subtract line 6 from line 1 . . . . . . . . . . . . 7. .
8. Enter the amount from Worksheet X, line 30.
If you did not complete Worksheet X, enter
the amount from Worksheet W, line 16 . . . . 8. .
9. Enter the smaller of line 7 or line 8. Then, go
to Step 4 next . . . . . . . . . . . . . . . . . . . . 9. .
More than one trade or business. If you have more
than one trade or business under which you established a
qualified health plan, you must complete lines 1 through 7
separately for each trade or business. Use the following
instructions to complete the Step 3 Worksheet.
Line 1. Enter the amounts for the separate trade or
business.
If the Caution under line 1 applies to you, skip lines 2
through 5. Enter on line 6 the total of the column (e)
amounts for the months you paid specified premiums that
are allocable to the specified premiums you entered on
line 1 for the separate trade or business. You can allocate
the column (e) amounts using any reasonable method.
One reasonable method is based on enrollment premiums
for each plan. Under this method, multiply the total of the
column (e) amounts for the months you paid specified
premiums by a fraction. The numerator of the fraction is
the amount of specified premiums you entered on line 1CAUTION
!
Publication 974 (2021) Page 63
for the separate trade or business. The denominator of the
fraction is the total of the column (a) amounts for the
months you paid specified premiums.
Line 2. Enter the Step 2 PTC that is allocable to the
specified premiums you entered on line 1 for the separate
trade or business. You can allocate the Step 2 PTC using
any reasonable method. One reasonable method is based
on enrollment premiums for each plan. Under this method,
multiply the Step 2 PTC by a fraction. The numerator of
the fraction is the amount of specified premiums you en-
tered on line 1 for the separate trade or business. The de-
nominator of the fraction is the amount on line 11, column
(a), or the total of lines 12 through 23, column (a), of the
Step 2 Form 8962.
Lines 3 through 6. Complete these lines for the plan
established under the separate trade or business.
Line 7. After you complete this line for each trade or
business, add the amounts on line 7 for all the trades or
businesses. Use the total of the line 7 amounts to com-
plete lines 8 and 9.
Lines 8 and 9. Complete these lines once for all
trades or businesses.
Step 4
Refigure the total PTC on another Form 8962. Complete
this Form 8962 through line 29. When refiguring the total
PTC, use all enrollment premiums for qualified health
plans in which you or any individual in your tax family en-
rolled. Determine AGI, modified AGI, and household in-
come using the total of the Step 3 Worksheet, line 9, and
Worksheet W, line 14, as your self-employed health insur-
ance deduction. Use Worksheets 1-1 and 1-2 in the Form
8962 instructions to figure modified AGI and household in-
come.
Step 5
Refigure your self-employed health insurance deduction
for specified premiums by completing the Step 5 Work-
sheet.
If you have more than one trade or business un-
der which you established a qualified health plan,
see More than one trade or business, later, before
you complete the Step 5 Worksheet.
Step 5 Worksheet
Enter amounts in dollars and cents. Do not round to whole
dollars.CAUTION
!
1. Enter the amount from line 1 of the Step
3 Worksheet . . . . . . . . . . . . . . . . . . . . . 1. .
Caution. If you skipped lines 2 through 5 of
the Step 3 Worksheet, skip lines 2 and 3
below and enter on line 4 the total of the
column (e) amounts from your Step 4 Form
8962 for the months you paid specified
premiums.
2. Enter the total PTC (Form 8962, line 24) you
figured in Step 4, earlier . . . . . . . . . . . . . 2. .
3. Enter the amount from line 5 of the Step
3 Worksheet . . . . . . . . . . . . . . . . . . . . . 3.
4. Multiply line 3 by line 2 . . . . . . . . . . . . . . 4. .
5. Subtract line 4 from line 1 . . . . . . . . . . . . 5. .
6. Enter the amount from Worksheet X, line 30.
If you did not complete Worksheet X, enter
the amount from Worksheet W, line 16 . . . . 6. .
7. Enter the smaller of line 5 or line 6. Then, go
to Step 6 next . . . . . . . . . . . . . . . . . . . . 7. .
More than one trade or business. If you have more
than one trade or business under which you established a
qualified health plan, you must complete lines 1 through 5
separately for each trade or business. Use the following
instructions to complete the Step 5 Worksheet.
Line 1. Enter the amount from the Step 3 Worksheet
for the same separate trade or business for which you are
completing the Step 5 Worksheet.
If the Caution under line 1 applies to you, skip lines 2
and 3. Enter on line 4 the total of the column (e) amounts
for the months you paid specified premiums that are allo-
cable to the specified premiums you entered on line 1 for
the separate trade or business. Allocate the column (e)
amounts using the same method you used on the Step 3
Worksheet.
Line 2. Enter the Step 4 PTC that is allocable to the
premiums you entered on line 1 for the separate trade or
business. Use the same allocation method you used on
the Step 3 Worksheet.
Line 3. Enter the amount from the Step 3 Worksheet
for the same separate trade or business for which you are
completing the Step 5 Worksheet.
Line 5. After you complete this line for each trade or
business, add the amounts on line 5 for all the trades or
businesses. Use the total of the line 5 amounts to com-
plete lines 6 and 7.
Lines 6 and 7. Complete these lines once for all
trades or businesses.
Step 6
Answer the following three questions.
1. Is the change in the self-employed health insurance
deduction from Step 3 to Step 5 less than $1.00?
Yes No
2. Is the change in the total PTC from Step 2 to Step 4
less than $1.00?
Yes No
Page 64 Publication 974 (2021)
3. Did you answer “Yes” to both questions 1 and 2?
Yes. You can claim a PTC for the amount you fig-
ured in Step 4. Attach the Form 8962 you used in
Step 4 to your tax return. You can claim a self-em-
ployed health insurance deduction for the specified
premiums equal to the amount on line 7 of the Step 5
Worksheet.
Note. Your self-employed health insurance deduction
is the total of the Step 5 Worksheet, line 7, and Work-
sheet W, line 14. Enter this total on line 17 of Sched-
ule 1 (Form 1040).
No. Repeat Step 4 and Step 5 (using amounts de-
termined in the immediately preceding step) until
changes in both the self-employed health insurance
deduction and the total PTC between steps are less
than $1.00.
If you are unable to complete Step 6 because
changes between steps are always $1.00 or
more, do not use the Iterative Calculation
Method. Instead, use the Simplified Calculation Method or
any computation method that satisfies the rules for the
self-employed health insurance deduction and PTC as
long as the sum of the deduction claimed for the premi-
ums and the PTC computed, taking the deduction into ac-
count, is less than or equal to the premiums.
Simplified Calculation Method
Follow the steps below to figure your self-employed health
insurance deduction and PTC under the Simplified Calcu-
lation Method. You do not have to use this method. You
can use the Iterative Calculation Method (discussed ear-
lier) if you can complete Step 6 of that method or you can
use any computation method that satisfies each set of
rules as long as the sum of the deduction claimed for the
premiums and the PTC computed, taking the deduction
into account, is less than or equal to the premiums.
Step 1
Figure your AGI, modified AGI, and household income us-
ing Worksheet X, line 31, as your self-employed health in-
surance deduction. If you did not fill out Worksheet X, use
the amount from Worksheet W, line 17. Use Worksheets
1-1 and 1-2 in the Form 8962 instructions to figure modi-
fied AGI and household income.
If you are claiming any of the following deductions
or exclusions, see Special Instructions for
Self-Employed Individuals Who Claim Certain De-
ductions/Exclusions, later, before you complete Step 1.
1. Passive activity losses from rental real estate activi-
ties and lines 1d and 3 of Form 8582 are losses.
2. IRA deduction and you (or your spouse if filing a joint
return) were covered by a retirement plan at work or
through self-employment.CAUTION
!CAUTION
!
3. Exclusion of interest from series EE and I U.S. sav-
ings bonds issued after 1989.
4. Student loan interest deduction.
Step 2
Figure the total PTC on Form 8962 using the AGI, modi-
fied AGI, and household income you determined in Step
1. Enter the modified AGI and household income from
Step 1 on the Form 8962. When figuring the PTC, use all
enrollment premiums for qualified health plans in which
you or any individual in your tax family enrolled. Complete
this Form 8962 only through line 24. Do not attach this
Form 8962 to your tax return.
Cannot take the PTC. If you are not eligible to take the
PTC, stop here. Do not use this method. Instead, figure
your self-employed health insurance deduction using the
Self-Employed Health Insurance Deduction Worksheet in
the Instructions for Form 1040 or the Instructions for Form
1040-NR or, if required, Worksheet 6-A in chapter 6 of
Pub. 535. If you are following the instructions under Spe-
cial Instructions for Self-Employed Individuals Who Claim
Certain Deductions/Exclusions, later, make this determi-
nation when you complete the final iteration of Step 2. Re-
figure the deductions/exclusions if you are not eligible for
the PTC.
Step 3
Figure your self-employed health insurance deduction by
completing the following worksheet.
If you have more than one trade or business un-
der which you established a qualified health plan,
see More than one trade or business below be-
fore you complete the Step 3 Worksheet.CAUTION
!
Publication 974 (2021) Page 65
Step 3 Worksheet
1. Enter the amount from Worksheet
W, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . 1.
Caution. If the amounts on lines 12 through
23, column (e), of your Step 2 Form 8962
are not the same for each month and you
had specified premiums for less than 12
months, skip lines 2 through 5 below and
enter on line 6 the total of those column (e)
amounts for the months you paid specified
premiums.
2. Enter the total PTC (Form 8962, line 24)
you figured in Step 2, earlier . . . . . . . . . . . 2.
3. Enter the number of months in 2021 for
which specified premiums were
paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
Note. Self-employment for part of a month
counts as a full month of self-employment.
4. Enter the number of months someone in
your coverage family was enrolled in the
qualified health plan . . . . . . . . . . . . . . . . . 4.
5. Divide line 3 by line 4 . . . . . . . . . . . . . . . . 5.
6. Multiply line 5 by line 2 . . . . . . . . . . . . . . . 6.
7. Subtract line 6 from line 1 . . . . . . . . . . . . . 7.
8. Enter the amount from Worksheet X,
line 30. If you did not complete Worksheet
X, enter the amount from Worksheet
W, line 16 . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Enter the smaller of line 7 or line 8 . . . . . . 9.
10. Enter the amount from Worksheet
W, line 14 . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Add lines 9 and 10. Use this amount as your
self-employed health insurance deduction
in Step 4 next. Also enter this amount on
line 17 of Schedule 1 (Form 1040) . . . . . . 11.
More than one trade or business. If you have more
than one trade or business under which you established a
qualified health plan, you must complete lines 1 through 7
separately for each trade or business. Use the following
instructions to complete the Step 3 Worksheet.
Line 1. Enter the amounts for the separate trade or
business.
If the Caution under line 1 applies to you, skip lines 2
through 5. Enter on line 6 the total of the column (e)
amounts for the months you paid specified premiums that
are allocable to the specified premiums you entered on
line 1 for the separate trade or business. You can allocate
the column (e) amounts using any reasonable method.
One reasonable method is based on enrollment premiums
for each plan. Under this method, multiply the total of the
column (e) amounts for the months you paid specified
premiums by a fraction. The numerator of the fraction is
the amount of specified premiums you entered on line 1
for the separate trade or business. The denominator of the
fraction is the total of the column (a) amounts for the
months you paid specified premiums.
Line 2. Enter the Step 2 PTC that is allocable to the
specified premiums you entered on line 1 for the separate
trade or business. You can allocate the Step 2 PTC using
any reasonable method. One reasonable method is based
on enrollment premiums for each plan. Under this method,
multiply the Step 2 PTC by a fraction. The numerator of
the fraction is the amount of specified premiums you en-
tered on line 1 for the separate trade or business. The de-
nominator of the fraction is the amount on line 11, column
(a), or the total of lines 12 through 23, column (a), of the
Step 2 Form 8962.
Lines 3 through 6. Complete these lines for the plan
established under the separate trade or business.
Line 7. After you complete this line for each trade or
business, add the amounts on line 7 for all the trades or
businesses. Use the total of the line 7 amounts to com-
plete lines 8 through 11.
Lines 8 through 11. Complete these lines once for all
trades or businesses.
Step 4
Refigure the final PTC on another Form 8962. Complete
this Form 8962 through line 29. Attach this Form 8962 to
your tax return. When refiguring the PTC, use all enroll-
ment premiums for qualified health plans in which you or
any individual in your tax family enrolled. Determine AGI,
modified AGI, and household income using the amount
from line 11 of the Step 3 Worksheet as your self-em-
ployed health insurance deduction. Use Worksheets 1-1
and 1-2 in the Form 8962 instructions to figure modified
AGI and household income.
Special Instructions for
Self-Employed Individuals Who Claim
Certain Deductions/Exclusions
The instructions in this section apply to you if you claim
any of the following deductions or exclusions.
1. Passive activity losses from rental real estate activi-
ties and lines 1d and 3 of Form 8582 are losses.
2. IRA deduction and you (or your spouse if filing a joint
return) were covered by a retirement plan at work or
through self-employment.
3. Exclusion of interest from series EE and I U.S. sav-
ings bonds issued after 1989.
4. Student loan interest deduction.
Read the following instructions if you are claiming one
or more of the deductions/exclusions listed above. Read
these instructions before you complete the Iterative Cal-
culation Method or Simplified Calculation Method.
1. The first time you complete the Iterative Calculation
Method or Simplified Calculation Method, you do so
without including any of the deductions/exclusions
listed above in AGI, modified AGI, or household in-
come. If you use the Simplified Calculation Method,
complete it only through Step 3. Enter “400” on the in-
terim Form 8962, line 5, if you answer “Yes” on Work-
sheet 2, line 3, in the Form 8962 instructions.
Page 66 Publication 974 (2021)
2. After you complete (1), figure the deduction/exclusion
using the appropriate form or worksheet in your tax
return instructions. When figuring modified AGI on the
form or worksheet (or AGI on Form 8903), use as your
self-employed health insurance deduction the amount
from Step 6 of the Iterative Calculation Method or
Step 3 of the Simplified Calculation Method.
If you are claiming more than one deduction/exclusion
on the list, you must figure the deductions/exclusions
in the order shown in the list. For example, if you are
claiming the student loan interest deduction and the
exclusion of interest from series EE and I U.S. savings
bonds, you must figure the exclusion of interest from
series EE and I U.S. savings bonds first and complete
(3) and (4) or (5) using that exclusion. Then, you fig-
ure the student loan interest deduction, as explained
in (5) or at the end of Worksheets Y and Z.
3. Enter the deduction/exclusion you figured in (2) on
your tax return.
4. If you completed Worksheet X, complete Worksheet
Y and follow the instructions under line 22 of that
worksheet. Skip (5). If you file Form 8885, also see
Special instructions for filers of Form 8885, later.
5. If you did not complete Worksheet X, do the following.
a. Repeat the Iterative Calculation Method or Simpli-
fied Calculation Method. Use the deduction/exclu-
sion from (2) in any step that requires you to figure
AGI, modified AGI, and household income.
b. If the amount from (2) is the only deduction/exclu-
sion on the list you are claiming, complete either
method through the last step and follow the step
instructions for claiming the PTC and self-em-
ployed health insurance deduction on your return.
Skip (5c).
c. If the amount from (2) is not the only deduction/
exclusion on the list you are claiming, repeat the
Iterative Calculation Method through Step 6 or the
Simplified Calculation Method through Step 3. En-
ter “400” on the interim Form 8962, line 5, if you
answered “Yes” on Worksheet 2, line 3, in the
Form 8962 instructions. Then, figure the additional
deduction/exclusion using the appropriate form or
worksheet in your tax return instructions. When
figuring modified AGI on the form or worksheet (or
AGI on Form 8903), use as your self-employed
health insurance deduction the amount from Step
6 of the Iterative Calculation Method or Step 3 of
the Simplified Calculation Method. Then, repeat
(3) and (5) for each additional deduction/exclu-
sion. Follow (5b) for your final deduction/exclu-
sion.
Special instructions for filers of Form 8885. If you file
Form 8885, and you completed Worksheet X, use the fol-
lowing instructions to complete Worksheets Y and Z.
If (1) you are electing to take the HCTC on Form 8885
for at least 1 month of the year for an individual(s) who
was also enrolled in a qualified health plan offered through
the Marketplace for at least 1 other month of the year, and
(2) you did not receive the benefit of advance monthly
payments of the HCTC for that individual(s) during the
year, do the following.
• Skip lines 1 through 17.
• Enter the amount from Worksheet W, line 1, on
line 18.
• Complete lines 19 through 22 as instructed.
If you did receive the benefit of advance monthly pay-
ments of the HCTC for 1 or more months of the year for an
individual(s) who was also enrolled in a qualified health
plan offered through the Marketplace for at least 1 other
month of the year, complete Form 8885 through line 4. If
you are not instructed to complete the Excess Advance
HCTC Repayment Worksheet in the Instructions for Form
8885 or if you enter an amount on line 3 of that worksheet,
then add the amount from Form 8885, line 5, to the
amount you are instructed to enter on lines 4, 8, and 11 of
Worksheets Y and Z. If you are instructed to complete the
Excess Advance HCTC Repayment Worksheet and enter
an amount on line 4 of that worksheet, complete Work-
sheets Y and Z using the repayment limitations provided
without any adjustments.
If you do not qualify to take the PTC (Form 8962,
line 24, is -0- or blank), do not enter the amount from
Worksheet X, line 25; Worksheet Y, line 14; or Worksheet
Z, line 14, on Form 8962, line 28. Instead, see Line 28 in
the Form 8962 instructions to find out what to enter on
line 28.
Publication 974 (2021) Page 67
Worksheet Y. Refiguring Household Income and the
Repayment Limitation When Claiming Certain Deductions
or Exclusions Keep for Your Records
Caution. If you are filing Form 8885, see Special instructions for filers of Form 8885 before you complete this work-
sheet.
1. Enter the amount from Worksheet X, line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the deduction or exclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Revised household income. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter the smaller of Worksheet W, line 19, or $650 ($325 if your filing status is single) . . . . . . . . . . 4.
5. Subtract line 4 from line 3. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter the amount from Worksheet X, line 17b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Divide line 5 by line 6. If the result is not a whole percentage, do not round; instead, multiply this
number by 100 (to express it as a percentage) and then drop any numbers after the decimal point.
For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for 3.997,
enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. %
• If the result is less than 200, enter $650 ($325 if your filing status is single) on line 14. Skip
lines 8 through 13.
• If the result is 200 or more, go to line 8.
8. Enter the smaller of Worksheet W, line 19, or $1,600 ($800 if your filing status is single) . . . . . . . . 8.
9. Subtract line 8 from line 3. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Divide line 9 by line 6. If the result is not a whole percentage, do not round; instead, multiply this
number by 100 (to express it as a percentage) and then drop any numbers after the decimal point.
For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for 3.997,
enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. %
• If the result is less than 300, enter $1,600 ($800 if your filing status is single) on line 14. Skip
lines 11 through 13.
• If the result is 300 or more, go to line 11.
11. Enter the smaller of Worksheet W, line 19, or $2,700 ($1,350 if your filing status is single) . . . . . . 11.
12. Subtract line 11 from line 3. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Divide line 12 by line 6. If the result is not a whole percentage, do not round; instead, multiply this
number by 100 (to express it as a percentage) and then drop any numbers after the decimal point.
For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for 3.997,
enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. %
• If the result is less than 400, enter $2,700 ($1,350 if your filing status is single) on line 14.
• If the result is 400 or more, enter the amount from Worksheet W, line 2, on line 14.
14. Enter the amount you were instructed to enter here by line 7, 10, or 13. Also, enter this amount on
line 28 of the Form 8962 you attach to your tax return if you are required to complete that line and
you do not complete Worksheet Z. Do not enter an amount from Table 5 in the Form 8962
instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Enter the amount from Worksheet X, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Add lines 14 and 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. Enter the amount from Worksheet X, line 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.
18. Enter the smaller of line 16 or line 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
19. Enter the amount from Worksheet X, line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
20. Enter the smaller of line 18 or line 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.
21. Enter the amount from Worksheet X, line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.
22. Add lines 20 and 21. Then, see Next below for further instructions . . . . . . . . . . . . . . . . . . . . . . . . . . 22.
Next. Repeat the Iterative Calculation Method or Simplified Calculation Method, whichever applies. In Step 1 of either method, use
the amount on line 22 above as your self-employed health insurance deduction. Also, use the amount on line 2 above in any step
that requires you to figure AGI, modified AGI, and household income. If the amount on line 2 above is the only deduction/exclusion
on the list that you are claiming, complete either method through the last step. If you are claiming another deduction/exclusion on
the list, do the following.
• When you repeat either method as explained above, complete the Iterative Calculation Method through Step 6 or complete the
Simplified Calculation Method through Step 3. Enter “400” on the interim Form 8962, line 5, if you answer “Yes” on Worksheet
2, line 3, in the Form 8962 instructions.
• Figure the other deduction/exclusion using the appropriate form or the worksheet provided in your tax return instructions. Use
the self-employed health insurance deduction you figured in either Step 6 of the Iterative Calculation Method or Step 3 of the
Simplified Calculation Method to figure modified AGI for the other deduction/exclusion.
• Then, complete Worksheet Z for the other deduction/exclusion.
Page 68 Publication 974 (2021)
Worksheet Z. Refiguring Household Income and the
Repayment Limitation When Claiming Certain Deductions
or Exclusions Keep for Your Records
Before you begin:
• CompleteWorksheet Ybefore you complete Worksheet Z.
• If you are filing Form 8885, see Special instructions for filers of Form 8885 before you complete this worksheet.
1. Enter the amount from Worksheet Y, line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the deduction or exclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Revised household income. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter the smaller of Worksheet W, line 19, or $650 ($325 if your filing status is single) . . . . . . . . . . 4.
5. Subtract line 4 from line 3. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter the amount from Worksheet X, line 17b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Divide line 5 by line 6. If the result is not a whole percentage, do not round; instead, multiply this
number by 100 (to express it as a percentage) and then drop any numbers after the decimal
point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for
3.997, enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. %
• If the result is less than 200, enter $650 ($325 if your filing status is single) on line 14. Skip
lines 8 through 13.
• If the result is 200 or more, go to line 8.
8. Enter the smaller of Worksheet W, line 19, or $1,600 ($800 if your filing status is single) . . . . . . . . 8.
9. Subtract line 8 from line 3. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Divide line 9 by line 6. If the result is not a whole percentage, do not round; instead, multiply this
number by 100 (to express it as a percentage) and then drop any numbers after the decimal
point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for
3.997, enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. %
• If the result is less than 300, enter $1,600 ($800 if your filing status is single) on line 14. Skip
lines 11 through 13.
• If the result is 300 or more, go to line 11.
11. Enter the smaller of Worksheet W, line 19, or $2,700 ($1,350 if your filing status is single) . . . . . . 11.
12. Subtract line 11 from line 3. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Divide line 12 by line 6. If the result is not a whole percentage, do not round; instead, multiply this
number by 100 (to express it as a percentage) and then drop any numbers after the decimal
point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for
3.997, enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. %
• If the result is less than 400, enter $2,700 ($1,350 if your filing status is single) on line 14.
• If the result is 400 or more, enter the amount from Worksheet W, line 2, on line 14.
14. Enter the amount you were instructed to enter here by line 7, 10, or 13. Also enter this amount on
line 28 of the Form 8962 you attach to your tax return if you are required to complete that line. Do
not enter an amount from Table 5 in the Form 8962 instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Enter the amount from Worksheet X, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Add lines 14 and 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17. Enter the amount from Worksheet X, line 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.
18. Enter the smaller of line 16 or line 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
19. Enter the amount from Worksheet X, line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
20. Enter the smaller of line 18 or line 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.
21. Enter the amount from Worksheet X, line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.
22. Add lines 20 and 21. Then, see Next below for further instructions . . . . . . . . . . . . . . . . . . . . . . . . . . 22.
Next. Repeat the Iterative Calculation Method or Simplified Calculation Method, whichever applies. In Step 1 of either method, use
the amount on line 22 above as your self-employed health insurance deduction. Also use the amounts on line 2 of Worksheets Y
and Z in any step that requires you to figure AGI, modified AGI, and household income. If you are not claiming any more deductions/
exclusions on the list, complete either method through the last step and follow the step instructions for claiming the PTC and
self-employed health insurance deduction on your tax return. If you are claiming another deduction/exclusion on the list, do the
following.
• When you repeat either method as explained above, complete the Iterative Calculation Method through Step 6 or complete the
Simplified Calculation Method through Step 3. Enter “400” on the interim Form 8962, line 5, if you answer “Yes” on Worksheet
2, line 3, in the Form 8962 instructions.
• Figure the other deduction/exclusion using the appropriate form or the worksheet provided in your tax return instructions. Use
the self-employed health insurance deduction you figured in either Step 6 of the Iterative Calculation Method or Step 3 of the
Simplified Calculation Method to figure modified AGI for the other deduction/exclusion.
• Then, complete another Worksheet Z for the other deduction/exclusion.
Publication 974 (2021) Page 69
Illustrated Example of the Simplified
Calculation Method
The following example illustrates the Simplified Calcula-
tion Method.
In 2021, Carla Birch, her husband Jim, and their two
dependent children enrolled in the applicable SLCSP
through the Marketplace. The annual premium was
$13,000, and $4,200 in APTC was paid for Carla, her hus-
band, and two dependent children. All of the premiums
are specified premiums. Carla operated a business as a
sole proprietorship during the entire year. Carla and Jim
are filing a joint Form 1040 (not illustrated). The income
and deductions on their Form 1040 and Schedule 1 (Form
1040), excluding Schedule 1 (Form 1040), line 17, consist
of the following.
Jim's salary (Form 1040, line 1) . . . . . . . . . . . $83,675
Taxable interest (Form 1040, line 2b) . . . . . . 419
Carla’s net profit from her business on
Schedule 1 (Form 1040), line 3 . . . . . . . . . . . 30,000
Total income (Form 1040, line 9) . . . . . . . . . . 114,094
Deductible part of Carla’s self-employment
tax (Schedule 1 (Form 1040), line 15) . . . . . . . 2,119
Carla’s qualified retirement plan deduction
(Schedule 1 (Form 1040), line 16) . . . . . . . . . 2,500
Carla’s Worksheet W
Carla begins by completing Worksheet W to determine
the limit on the self-employed health insurance deduction
for specified premiums.
Carla's Worksheet X
Because Carla had APTC during the months of self-em-
ployment, she completes Worksheet X, Parts I and III. She
skips Part II because neither one of her children is re-
quired to file a federal income tax return for 2021.
Line 1. Carla enters $114,094, which is the total income
shown on line 9 of her Form 1040. Total income is the
sum of Jim’s salary, taxable interest, and Carla’s net
profit.
Line 4. Carla enters $4,619. This is the total of the de-
ductible part of her self-employment tax and her qualified
retirement plan deduction.
Line 17b. Carla enters $26,200. This is the federal pov-
erty line shown in Table 1-1 in the Form 8962 instructions
for a family size of four.
Page 70 Publication 974 (2021)
The Simplified Calculation Method for Carla
Step 1. Carla figures her AGI, modified AGI, and house-
hold income using $11,500 as the self-employed health
insurance deduction. (She does not enter $11,500 on
Schedule 1 (Form 1040), line 17.) Her AGI is $97,975, fig-
ured as follows.
Total income from Form 1040, line 9 . . . . . . . 114,094
Minus: deductible part of self-employment
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,119)
Minus: qualified retirement plan deduction . . . (2,500)
Minus: self-employed health insurance
deduction from Worksheet X, line 31 . . . . . . . (11,500)
Equals: AGI . . . . . . . . . . . . . . . . . . . . . . . . . . 97,975
Carla uses this AGI amount on Worksheet 1-1. Taxpay-
er’s Modified AGI Worksheet—Line 2a (not illustrated) in
the Form 8962 instructions to figure her modified AGI and
household income. Her modified AGI and household in-
come are each $97,975, the same as her AGI figured in
this Step 1.
Step 2. Carla figures the total PTC on Form 8962 using
the modified AGI and household income figured in Step 1.
This Form 8962 is shown later in this publication for pur-
poses of illustration and labeled “Carla’s Step 2 PTC.” She
completes this Form 8962 only through line 24. She uses
the total PTC shown on line 24 ($5,329) to figure the
self-employed health insurance deduction in Step 3, later.
She does not attach this Form 8962 to her tax return.
Step 3. Carla completes the following worksheet to figure
the self-employed health insurance deduction she will en-
ter on Schedule 1 (Form 1040), line 17.
Carla's Worksheet W. Figuring the Limit on the Self-Employed Health Insurance Deduction
for Specified Premiums
Caution. If you have more than one trade or business under which a qualified health plan is established, complete
lines 4 through 13 separately for each trade or business. Add the amounts on line 13 for all the trades or businesses.
Then, complete lines 14 through 17 once for all trades or businesses.
1. Enter your specified premiums. See Specified Premiums under Instructions for Worksheet
P, earlier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 13,000
2. Enter the APTC from Form 1095-A, Part III, column C, that is attributable to the premiums on
line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 4,200
3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 8,800
4. Enter your net profit* and any other earned income** from the business under which the qualified
health plan is established. Do not include Conservation Reserve Program payments exempt from
self-employment tax. If the business is an S corporation, skip to line 11 . . . . . . . . . . . . . . . . . . . . . . 4. 30,000
5. Enter the total of all net profits* from: Schedule C (Form 1040), line 31; Schedule F (Form 1040),
line 34; or Schedule K-1 (Form 1065), box 14, code A, plus any other income allocable to the
profitable business. Do not include Conservation Reserve Program payments exempt from
self-employment tax. See the Instructions for Schedule SE (Form 1040). Do not include any net
losses shown on these schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. 30,000
6. Divide line 4 by line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. 1.0
7. Multiply line 15 of Schedule 1 (Form 1040) by line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. 2,119
8. Subtract line 7 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. 27,881
9. Enter the amount, if any, from line 16 of Schedule 1 (Form 1040), attributable to the same
business for which the qualified health plan is established . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. 2,500
10. Subtract line 9 from line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. 25,381
11. Enter your Medicare wages (Form W-2, box 5) from an S corporation in which you are a
more-than-2% shareholder and in which the qualified health plan is established . . . . . . . . . . . . . . . 11.
12. Enter any amount from Form 2555, line 45, attributable to the amount entered on line 4 or line 11
above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. -0-
Note. If you are not filing Form 2555, enter -0-.
13. Subtract line 12 from line 10 or line 11, whichever applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. 25,381
14. Enter your self-employed health insurance deduction for nonspecified premiums from Worksheet
P, line 3, or Worksheet 6-A, line 14, in chapter 6 of Pub. 535 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Subtract line 14 from line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. 25,381
16. Enter the smaller of line 3 or line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. 8,800
17. Add lines 14 and 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17. 8,800
18. Is line 2 blank or -0-? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
Yes. Skip line 19 and Worksheet X. Use one of the methods that follow Worksheet X to figure
the PTC and self-employed health insurance deduction for specified premiums.
x No. Go to line 19.
19. Subtract line 16 from line 15. Then, go to Worksheet X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19. 16,581
* If you used either optional method to figure your net earnings from self-employment from any business, do not enter your net profit from the
business. Instead, enter the amount attributable to that business from Schedule SE, line 4b.
** Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. However, it does not include
capital gain income.
Publication 974 (2021) Page 71
Carla's Worksheet X. Figuring Household Income and the Repayment Limitation
Complete this worksheet only if APTC was paid to your insurer on your behalf for the months you were self-employed.
Part I: Taxpayer's Modified AGI
1. Combine the amounts from:
• Form 1040, 1040-SR, or 1040-NR, lines 2a and 9, and the excess, if any, of line 6a over
line 6b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 114,094
Note. See the instructions if you are filing Form 8582, 8814, or 8815.
2. Enter any amounts from Form 2555, lines 45 and 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 114,094
4. Enter the total of the amounts from:
• Schedule 1 (Form 1040), lines 11 through 16, 18, and 19a, plus any write-in adjustments
you entered on the dotted line next to Schedule 1 (Form 1040), line 26 . . . . . . . . . . . . . . . . . . 4. 4,619
Note. See the instructions if you made contributions to a traditional IRA.
5. Enter the amount from Worksheet W, line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter the amount from Worksheet W, line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. 8,800
7. Add lines 4, 5, and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. 13,419
8. Subtract line 7 from line 3. Then, go to Part II if you are claiming dependents on your tax return. If
you are not claiming any dependents on your tax return, skip Part II and go to Part III . . . . . . . . . . 8. 100,675
Part II: Dependents’ Modified AGI
Note. Lines 9–13 of this part are omitted because Carla's dependent children are not required to file federal income tax returns.
Part III: Repayment Limitation
Note. If you are filing Form 8885, see the Instructions for Worksheet X before completing this part.
14. Household income. Add lines 8 and 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14. 100,675
15. Enter the smaller of Worksheet W, line 19, or $650 ($325 if your filing status is single) . . . . . . . . . 15. 650
16. Subtract line 15 from line 14. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. 100,025
17a. Enter the number of qualifying individuals in your tax family
(including yourself) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17a. 4
17b. Enter the federal poverty line amount as determined by the family size on line 17a and federal
poverty Table 1-1, 1-2, or 1-3 for your state of residence during 2021 in the Form 8962
instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17b. 26,200
18. Divide line 16 by line 17b. If the result is not a whole percentage, do not round; instead, multiply
this number by 100 (to express it as a percentage) and then drop any numbers after the decimal
point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for
3.997, enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18. 381%
• If the result is less than 200, enter $650 ($325 if your filing status is single) on line 25. Skip
lines 19 through 24.
• If the result is 200 or more, go to line 19.
19. Enter the smaller of Worksheet W, line 19, or $1,600 ($800 if your filing status is single) . . . . . . . 19. 1,600
20. Subtract line 19 from line 14. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20. 99,075
21. Divide line 20 by line 17b. If the result is not a whole percentage, do not round; instead, multiply
this number by 100 (to express it as a percentage) and then drop any numbers after the decimal
point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for
3.997, enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21. 378%
• If the result is less than 300, enter $1,600 ($800 if your filing status is single) on line 25. Skip
lines 22 through 24.
• If the result is 300 or more, go to line 22.
22. Enter the smaller of Worksheet W, line 19, or $2,700 ($1,350 if your filing status is single) . . . . . 22. 2,700
23. Subtract line 22 from line 14. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23. 97,975
24. Divide line 23 by line 17b. If the result is not a whole percentage, do not round; instead, multiply
this number by 100 (to express it as a percentage) and then drop any numbers after the decimal
point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for
3.997, enter the result as 399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24. 373%
• If the result is less than 400, enter $2,700 ($1,350 if your filing status is single) on line 25.
• If the result is 400 or more, enter the amount from Worksheet W, line 2, on line 25.
25. Enter the amount you were instructed to enter here by line 18, 21, or 24. See instructions . . . . . . 25. 2,700
Part IV: Maximum Self-Employed Health Insurance Deduction
26. Add lines 6 and 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26. 11,500
27. Enter the amount from Worksheet W, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27. 13,000
28. Enter the smaller of line 26 or line 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28. 11,500
29. Enter the amount from Worksheet W, line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29. 25,381
30. Enter the smaller of line 28 or line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30. 11,500
31. Add lines 5 and 30. Then, use one of the methods that follow to figure the PTC and the
self-employed health insurance deduction for specified premiums . . . . . . . . . . . . . . . . . . . . . . . . . 31. 11,500
Page 72 Publication 974 (2021)
Carla’s Step 3 Worksheet
1. Enter the amount from Worksheet
W, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . 1. 13,000
Caution. If the amounts on lines 12 through
23, column (e), of your Step 2 Form 8962
are not the same for each month and you
had specified premiums for less than 12
months, skip lines 2 through 5 below and
enter on line 6 the total of those column (e)
amounts for the months you paid specified
premiums.
2. Enter the total PTC (Form 8962, line 24)
you figured in Step 2, earlier . . . . . . . . . . . 2. 5,329
3. Enter the number of months in 2021 for
which specified premiums were
paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 12
Note. Self-employment for part of a month
counts as a full month of self-employment.
4. Enter the number of months someone in
your coverage family was enrolled in the
qualified health plan . . . . . . . . . . . . . . . . . 4. 12
5. Divide line 3 by line 4 . . . . . . . . . . . . . . . . 5. 1.0
6. Multiply line 5 by line 2 . . . . . . . . . . . . . . . 6. 5,329
7. Subtract line 6 from line 1 . . . . . . . . . . . . . 7. 7,671
8. Enter the amount from Worksheet X,
line 30. If you did not complete Worksheet
X, enter the amount from Worksheet W,
line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. 11,500
9. Enter the smaller of line 7 or line 8 . . . . . . 9. 7,671
10. Enter the amount from Worksheet
W, line 14 . . . . . . . . . . . . . . . . . . . . . . . . 10. -0-
11. Add lines 9 and 10. Use this amount as
your self-employed health insurance
deduction in Step 4 next. Also enter this
amount on line 17 of Schedule 1 (Form
1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. 7,671
Step 4. Carla refigures the final PTC on another Form
8962. This Form 8962 is shown later in this publication for
purposes of illustration and is labeled “Carla’s Step 4
PTC.” Carla figures AGI, modified AGI, and household in-
come using the amount from line 11 of the Step 3 Work-
sheet as her self-employed health insurance deduction.
Her AGI is $101,804, figured as follows.
Carla’s Step 4 Worksheet
Total income from Form 1040, line 9 . . . . . . . . $114,094
Minus: deductible part of self-employment
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,119)
Minus: qualified retirement plan
deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,500)
Minus: self-employed health insurance
deduction from line 11 of the Step 3
Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,671)
Equals: AGI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,804
Carla uses this AGI amount on Worksheet 1-1. Taxpay-
er’s Modified AGI Worksheet—Line 2a (not illustrated) in
the Form 8962 instructions to refigure her modified AGI
and household income. Her modified AGI and household
income are each $101,804, the same as her AGI figured
earlier.
Carla completes Form 8962 through line 26. She enters
the amount from line 26 ($452) on Schedule 3 (Form
1040), line 9, and attaches Form 8962.
Publication 974 (2021) Page 73
Carla’s Step 2 PTCForm 8962
Department of the Treasury
Internal Revenue Service
Premium Tax Credit (PTC)
Attach to Form 1040, 1040-SR, or 1040-NR.
Go to www.irs.gov/Form8962 for instructions and the latest information.
OMB No. 1545-0074
2021Attachment
Sequence No. 73
Name shown on your return Your social security number
A. If you, or your spouse (if filing a joint return), received, or were approved to receive, unemployment compensation for any week beginning during 2021,
check the box. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. You cannot take the PTC if your filing status is married filing separately unless you qualify for an exception. See instructions. If you qualify, check the box
Part I Annual and Monthly Contribution Amount
1 Tax family size. Enter your tax family size. See instructions . . . . . . . . . . . . . . . . . 1
2a Modified AGI. Enter your modified AGI. See instructions . . . . . . . . . 2a
b Enter the total of your dependents’ modified AGI. See instructions . . . . . . 2b
3 Household income. Add the amounts on lines 2a and 2b. See instructions . . . . . . . . . . . . 3
4 Federal poverty line. Enter the federal poverty line amount from Table 1-1, 1-2, or 1-3. See instructions. Check the
appropriate box for the federal poverty table used. a Alaska b Hawaii c Other 48 states and DC 4
5 Household income as a percentage of federal poverty line (see instructions) . . . . . . . . . . . . 5 %
6 Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 Applicable figure. Using your line 5 percentage, locate your “applicable figure” on the table in the instructions . . 7
8a Annual contribution amount. Multiply line 3 by
line 7. Round to nearest whole dollar amount 8a
b Monthly contribution amount. Divide line 8a
by 12. Round to nearest whole dollar amount 8b
Part II Premium Tax Credit Claim and Reconciliation of Advance Payment of Premium Tax Credit
9 Are you allocating policy amounts with another taxpayer or do you want to use the alternative calculation for year of marriage? See instructions.
Yes. Skip to Part IV, Allocation of Policy Amounts, or Part V, Alternative Calculation for Year of Marriage. No. Continue to line 10.
10 See the instructions to determine if you can use line 11 or must complete lines 12 through 23.
Yes. Continue to line 11. Compute your annual PTC. Then skip lines 12–23
and continue to line 24.
No. Continue to lines 12–23. Compute
your monthly PTC and continue to line 24.
Annual
Calculation
(a) Annual enrollment
premiums (Form(s)
1095-A, line 33A)
(b) Annual applicable
SLCSP premium
(Form(s) 1095-A,
line 33B)
(c) Annual
contribution amount
(line 8a)
(d) Annual maximum
premium assistance
(subtract (c) from (b); if
zero or less, enter -0-)
(e) Annual premium tax
credit allowed
(smaller of (a) or (d))
(f) Annual advance
payment of PTC (Form(s)
1095-A, line 33C)
11 Annual Totals
Monthly
Calculation
(a) Monthly enrollment
premiums (Form(s)
1095-A, lines 21–32,
column A)
(b) Monthly applicable
SLCSP premium
(Form(s) 1095-A, lines
21–32, column B)
(c) Monthly
contribution amount
(amount from line 8b
or alternative marriage
monthly calculation)
(d) Monthly maximum
premium assistance
(subtract (c) from (b); if
zero or less, enter -0-)
(e) Monthly premium tax
credit allowed
(smaller of (a) or (d))
(f) Monthly advance
payment of PTC (Form(s)
1095-A, lines 21–32,
column C)
12 January
13 February
14 March
15 April
16 May
17 June
18 July
19 August
20 September
21 October
22 November
23 December
24 Total premium tax credit. Enter the amount from line 11(e) or add lines 12(e) through 23(e) and enter the total here 24
25 Advance payment of PTC. Enter the amount from line 11(f) or add lines 12(f) through 23(f) and enter the total here 25
26 Net premium tax credit. If line 24 is greater than line 25, subtract line 25 from line 24. Enter the difference here and
on Schedule 3 (Form 1040), line 9. If line 24 equals line 25, enter -0-. Stop here. If line 25 is greater than line 24,
leave this line blank and continue to line 27 . . . . . . . . . . . . . . . . . . . . . 26
Part III Repayment of Excess Advance Payment of the Premium Tax Credit
27 Excess advance payment of PTC. If line 25 is greater than line 24, subtract line 24 from line 25. Enter the difference here 27
28 Repayment limitation (see instructions) . . . . . . . . . . . . . . . . . . . . . . 28
29 Excess advance premium tax credit repayment. Enter the smaller of line 27 or line 28 here and on Schedule 2
(Form 1040), line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 37784Z Form 8962 (2021)
Carla and Jim Birch 000-00-0000
97,975
x
97,975
26,200
0.0783
6397,671
x
x
13,000 13,000 7,671 5,329 5,329 4,200
5,329
Carla’s Step 2 PTC
Page 74 Publication 974 (2021)
Carla’s Step 4 PTCForm 8962
Department of the Treasury
Internal Revenue Service
Premium Tax Credit (PTC)
Attach to Form 1040, 1040-SR, or 1040-NR.
Go to www.irs.gov/Form8962 for instructions and the latest information.
OMB No. 1545-0074
2021Attachment
Sequence No. 73
Name shown on your return Your social security number
A. If you, or your spouse (if filing a joint return), received, or were approved to receive, unemployment compensation for any week beginning during 2021,
check the box. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. You cannot take the PTC if your filing status is married filing separately unless you qualify for an exception. See instructions. If you qualify, check the box
Part I Annual and Monthly Contribution Amount
1 Tax family size. Enter your tax family size. See instructions . . . . . . . . . . . . . . . . . 1
2a Modified AGI. Enter your modified AGI. See instructions . . . . . . . . . 2a
b Enter the total of your dependents’ modified AGI. See instructions . . . . . . 2b
3 Household income. Add the amounts on lines 2a and 2b. See instructions . . . . . . . . . . . . 3
4 Federal poverty line. Enter the federal poverty line amount from Table 1-1, 1-2, or 1-3. See instructions. Check the
appropriate box for the federal poverty table used. a Alaska b Hawaii c Other 48 states and DC 4
5 Household income as a percentage of federal poverty line (see instructions) . . . . . . . . . . . . 5 %
6 Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 Applicable figure. Using your line 5 percentage, locate your “applicable figure” on the table in the instructions . . 7
8a Annual contribution amount. Multiply line 3 by
line 7. Round to nearest whole dollar amount 8a
b Monthly contribution amount. Divide line 8a
by 12. Round to nearest whole dollar amount 8b
Part II Premium Tax Credit Claim and Reconciliation of Advance Payment of Premium Tax Credit
9 Are you allocating policy amounts with another taxpayer or do you want to use the alternative calculation for year of marriage? See instructions.
Yes. Skip to Part IV, Allocation of Policy Amounts, or Part V, Alternative Calculation for Year of Marriage. No. Continue to line 10.
10 See the instructions to determine if you can use line 11 or must complete lines 12 through 23.
Yes. Continue to line 11. Compute your annual PTC. Then skip lines 12–23
and continue to line 24.
No. Continue to lines 12–23. Compute
your monthly PTC and continue to line 24.
Annual
Calculation
(a) Annual enrollment
premiums (Form(s)
1095-A, line 33A)
(b) Annual applicable
SLCSP premium
(Form(s) 1095-A,
line 33B)
(c) Annual
contribution amount
(line 8a)
(d) Annual maximum
premium assistance
(subtract (c) from (b); if
zero or less, enter -0-)
(e) Annual premium tax
credit allowed
(smaller of (a) or (d))
(f) Annual advance
payment of PTC (Form(s)
1095-A, line 33C)
11 Annual Totals
Monthly
Calculation
(a) Monthly enrollment
premiums (Form(s)
1095-A, lines 21–32,
column A)
(b) Monthly applicable
SLCSP premium
(Form(s) 1095-A, lines
21–32, column B)
(c) Monthly
contribution amount
(amount from line 8b
or alternative marriage
monthly calculation)
(d) Monthly maximum
premium assistance
(subtract (c) from (b); if
zero or less, enter -0-)
(e) Monthly premium tax
credit allowed
(smaller of (a) or (d))
(f) Monthly advance
payment of PTC (Form(s)
1095-A, lines 21–32,
column C)
12 January
13 February
14 March
15 April
16 May
17 June
18 July
19 August
20 September
21 October
22 November
23 December
24 Total premium tax credit. Enter the amount from line 11(e) or add lines 12(e) through 23(e) and enter the total here 24
25 Advance payment of PTC. Enter the amount from line 11(f) or add lines 12(f) through 23(f) and enter the total here 25
26 Net premium tax credit. If line 24 is greater than line 25, subtract line 25 from line 24. Enter the difference here and
on Schedule 3 (Form 1040), line 9. If line 24 equals line 25, enter -0-. Stop here. If line 25 is greater than line 24,
leave this line blank and continue to line 27 . . . . . . . . . . . . . . . . . . . . . 26
Part III Repayment of Excess Advance Payment of the Premium Tax Credit
27 Excess advance payment of PTC. If line 25 is greater than line 24, subtract line 24 from line 25. Enter the difference here 27
28 Repayment limitation (see instructions) . . . . . . . . . . . . . . . . . . . . . . 28
29 Excess advance premium tax credit repayment. Enter the smaller of line 27 or line 28 here and on Schedule 2
(Form 1040), line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 37784Z Form 8962 (2021)
Carla and Jim Birch 000-00-0000
101,804
x
101,804
26,200
0.0820
6968,348
x
x
13,000 13,000 8,348 4,652 4,652 4,200
4,652
4,200
Carla’s Step 4 PTC
Publication 974 (2021) Page 75
How To Get Tax Help
If you have questions about a tax issue; need help prepar-
ing your tax return; or want to download free publications,
forms, or instructions, go to IRS.gov to find resources that
can help you right away.
Preparing and filing your tax return. After receiving all
your wage and earnings statements (Forms W-2, W-2G,
1099-R, 1099-MISC, 1099-NEC, etc.); unemployment
compensation statements (by mail or in a digital format) or
other government payment statements (Form 1099-G);
and interest, dividend, and retirement statements from
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turn. You can prepare the tax return yourself, see if you
qualify for free tax preparation, or hire a tax professional to
prepare your return.
For 2021, if you received an Economic Impact
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2021 Economic Impact Payment. If you received
Advance Child Tax Credit payments, refer to your Letter
6419.
Free options for tax preparation. Go to IRS.gov to see
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Go to IRS.gov/TCE, download the free IRS2Go app,
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qualified veterans may use MilTax, a free tax service
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!
Also, the IRS offers Free Fillable Forms, which can
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Using online tools to help prepare your return. Go to
IRS.gov/Tools for the following.
• The Earned Income Tax Credit Assistant (IRS.gov/
EITCAssistant) determines if you’re eligible for the
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makes it easier for everyone to pay the correct amount
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(IRS.gov/HomeBuyer) tool provides information on
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• The Sales Tax Deduction Calculator (IRS.gov/
SalesTax) figures the amount you can claim if you
itemize deductions on Schedule A (Form 1040).
Getting answers to your tax questions. On
IRS.gov, you can get up-to-date information on
current events and changes in tax law.
• IRS.gov/Help: A variety of tools to help you get an-
swers to some of the most common tax questions.
• IRS.gov/ITA: The Interactive Tax Assistant, a tool that
will ask you questions and, based on your input, pro-
vide answers on a number of tax law topics.
• IRS.gov/Forms: Find forms, instructions, and publica-
tions. You will find details on 2021 tax changes and
hundreds of interactive links to help you find answers
to your questions.
• You may also be able to access tax law information in
your electronic filing software.
Need someone to prepare your tax return? There are
various types of tax return preparers, including tax prepar-
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attorneys, and many others who don’t have professional
credentials. If you choose to have someone prepare your
Page 76 Publication 974 (2021)
tax return, choose that preparer wisely. A paid tax pre-
parer is:
• Primarily responsible for the overall substantive accu-
racy of your return,
• Required to sign the return, and
• Required to include their preparer tax identification
number (PTIN).
Although the tax preparer always signs the return,
you're ultimately responsible for providing all the informa-
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return. Anyone paid to prepare tax returns for others
should have a thorough understanding of tax matters. For
more information on how to choose a tax preparer, go to
Tips for Choosing a Tax Preparer on IRS.gov.
Advance child tax credit payments. From July through
December 2021, advance payments were sent automati-
cally to taxpayers with qualifying children who met certain
criteria. The advance child tax credit payments were early
payments of up to 50% of the estimated child tax credit
that taxpayers may properly claim on their 2021 returns.
Go to IRS.gov/AdvCTC for more information about these
payments and how they can affect your taxes.
Coronavirus. Go to IRS.gov/Coronavirus for links to in-
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relief available for individuals and families, small and large
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Employers can register to use Business Services On-
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online W-2 filing options to CPAs, accountants, enrolled
agents, and individuals who process Form W-2, Wage
and Tax Statement, and Form W-2c, Corrected Wage and
Tax Statement.
IRS social media. Go to IRS.gov/SocialMedia to see the
various social media tools the IRS uses to share the latest
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The following IRS YouTube channels provide short, in-
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• Youtube.com/irsvideos.
• Youtube.com/irsvideosmultilingua.
• Youtube.com/irsvideosASL.
Watching IRS videos. The IRS Video portal
(IRSVideos.gov) contains video and audio presentations
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Online tax information in other languages. You can
find information on IRS.gov/MyLanguage if English isn’t
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Free Over-the-Phone Interpreter (OPI) Service. The
IRS is committed to serving our multilingual customers by
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Accessibility Helpline available for taxpayers with
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Getting tax forms and publications. Go to IRS.gov/
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Getting tax publications and instructions in eBook
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eBooks.
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Access your online account (individual taxpayers
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mation about your federal tax account.
• View the amount you owe and a breakdown by tax
year.
• See payment plan details or apply for a new payment
plan.
• Make a payment or view 5 years of payment history
and any pending or scheduled payments.
• Access your tax records, including key data from your
most recent tax return, your EIP amounts, and tran-
scripts.
• View digital copies of select notices from the IRS.
• Approve or reject authorization requests from tax pro-
fessionals.
• View your address on file or manage your communi-
cation preferences.
Tax Pro Account. This tool lets your tax professional
submit an authorization request to access your individual
taxpayer IRS online account. For more information, go to
IRS.gov/TaxProAccount.
Using direct deposit. The fastest way to receive a tax
refund is to file electronically and choose direct deposit,
which securely and electronically transfers your refund di-
rectly into your financial account. Direct deposit also
avoids the possibility that your check could be lost, stolen,
Publication 974 (2021) Page 77
or returned undeliverable to the IRS. Eight in 10 taxpayers
use direct deposit to receive their refunds. If you don’t
have a bank account, go to IRS.gov/DirectDeposit for
more information on where to find a bank or credit union
that can open an account online.
Getting a transcript of your return. The quickest way
to get a copy of your tax transcript is to go to IRS.gov/
Transcripts. Click on either “Get Transcript Online” or “Get
Transcript by Mail” to order a free copy of your transcript.
If you prefer, you can order your transcript by calling
800-908-9946.
Reporting and resolving your tax-related identity
theft issues.
• Tax-related identity theft happens when someone
steals your personal information to commit tax fraud.
Your taxes can be affected if your SSN is used to file a
fraudulent return or to claim a refund or credit.
• The IRS doesn’t initiate contact with taxpayers by
email, text messages, telephone calls, or social media
channels to request personal or financial information.
This includes requests for personal identification num-
bers (PINs), passwords, or similar information for
credit cards, banks, or other financial accounts.
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft
Central webpage, for information on identity theft and
data security protection for taxpayers, tax professio-
nals, and businesses. If your SSN has been lost or
stolen or you suspect you’re a victim of tax-related
identity theft, you can learn what steps you should
take.
• Get an Identity Protection PIN (IP PIN). IP PINs are
six-digit numbers assigned to taxpayers to help pre-
vent the misuse of their SSNs on fraudulent federal in-
come tax returns. When you have an IP PIN, it pre-
vents someone else from filing a tax return with your
SSN. To learn more, go to IRS.gov/IPPIN.
Ways to check on the status of your refund.
• Go to IRS.gov/Refunds.
• Download the official IRS2Go app to your mobile de-
vice to check your refund status.
• Call the automated refund hotline at 800-829-1954.
Note. The IRS can’t issue refunds before mid-Febru-
ary 2022 for returns that claimed the EIC or the additional
child tax credit (ACTC). This applies to the entire refund,
not just the portion associated with these credits.
Making a tax payment. Go to IRS.gov/Payments for in-
formation on how to make a payment using any of the fol-
lowing options.
• IRS Direct Pay: Pay your individual tax bill or estima-
ted tax payment directly from your checking or sav-
ings account at no cost to you.
• Debit or Credit Card: Choose an approved payment
processor to pay online or by phone.
• Electronic Funds Withdrawal: Schedule a payment
when filing your federal taxes using tax return prepara-
tion software or through a tax professional.
• Electronic Federal Tax Payment System: Best option
for businesses. Enrollment is required.
• Check or Money Order: Mail your payment to the ad-
dress listed on the notice or instructions.
• Cash: You may be able to pay your taxes with cash at
a participating retail store.
• Same-Day Wire: You may be able to do same-day
wire from your financial institution. Contact your finan-
cial institution for availability, cost, and time frames.
Note. The IRS uses the latest encryption technology to
ensure that the electronic payments you make online, by
phone, or from a mobile device using the IRS2Go app are
safe and secure. Paying electronically is quick, easy, and
faster than mailing in a check or money order.
What if I can’t pay now? Go to IRS.gov/Payments for
more information about your options.
• Apply for an online payment agreement (IRS.gov/
OPA) to meet your tax obligation in monthly install-
ments if you can’t pay your taxes in full today. Once
you complete the online process, you will receive im-
mediate notification of whether your agreement has
been approved.
• Use the Offer in Compromise Pre-Qualifier to see if
you can settle your tax debt for less than the full
amount you owe. For more information on the Offer in
Compromise program, go to IRS.gov/OIC.
Filing an amended return. You can now file Form
1040-X electronically with tax filing software to amend
2019 or 2020 Forms 1040 and 1040-SR. To do so, you
must have e-filed your original 2019 or 2020 return. Amen-
ded returns for all prior years must be mailed. Go to
IRS.gov/Form1040X for information and updates.
Checking the status of your amended return. Go to
IRS.gov/WMAR to track the status of Form 1040-X amen-
ded returns.
Note. It can take up to 3 weeks from the date you filed
your amended return for it to show up in our system, and
processing it can take up to 16 weeks.
Understanding an IRS notice or letter you’ve re-
ceived. Go to IRS.gov/Notices to find additional informa-
tion about responding to an IRS notice or letter.
You can use Schedule LEP, Request for Change in
Language Preference, to state a preference to receive no-
tices, letters, or other written communications from the
IRS in an alternative language, when these are available.
Once your Schedule LEP is processed, the IRS will deter-
mine your translation needs and provide you translations
when available. If you have a disability requiring notices in
an accessible format, see Form 9000.
Page 78 Publication 974 (2021)
Contacting your local IRS office. Keep in mind, many
questions can be answered on IRS.gov without visiting an
IRS TAC. Go to IRS.gov/LetUsHelp for the topics people
ask about most. If you still need help, IRS TACs provide
tax help when a tax issue can’t be handled online or by
phone. All TACs now provide service by appointment, so
you’ll know in advance that you can get the service you
need without long wait times. Before you visit, go to
IRS.gov/TACLocator to find the nearest TAC and to check
hours, available services, and appointment options. Or,
on the IRS2Go app, under the Stay Connected tab,
choose the Contact Us option and click on “Local Offices.”
The Taxpayer Advocate Service (TAS)
Is Here To Help You
What Is TAS?
TAS is an independent organization within the IRS that
helps taxpayers and protects taxpayer rights. Their job is
to ensure that every taxpayer is treated fairly and that you
know and understand your rights under the Taxpayer Bill
of Rights.
How Can You Learn About Your Taxpayer
Rights?
The Taxpayer Bill of Rights describes 10 basic rights that
all taxpayers have when dealing with the IRS. Go to
TaxpayerAdvocate.IRS.gov to help you understand what
these rights mean to you and how they apply. These are
your rights. Know them. Use them.
What Can TAS Do for You?
TAS can help you resolve problems that you can’t resolve
with the IRS. And their service is free. If you qualify for
their assistance, you will be assigned to one advocate
who will work with you throughout the process and will do
everything possible to resolve your issue. TAS can help
you if:
• Your problem is causing financial difficulty for you,
your family, or your business;
• You face (or your business is facing) an immediate
threat of adverse action; or
• You’ve tried repeatedly to contact the IRS but no one
has responded, or the IRS hasn’t responded by the
date promised.
How Can You Reach TAS?
TAS has offices in every state, the District of Columbia,
and Puerto Rico. Your local advocate’s number is in your
local directory and at TaxpayerAdvocate.IRS.gov/
Contact-Us. You can also call them at 877-777-4778.
How Else Does TAS Help Taxpayers?
TAS works to resolve large-scale problems that affect
many taxpayers. If you know of one of these broad issues,
report it to them at IRS.gov/SAMS.
TAS for Tax Professionals
TAS can provide a variety of information for tax professio-
nals, including tax law updates and guidance, TAS pro-
grams, and ways to let TAS know about systemic prob-
lems you’ve seen in your practice.
Low Income Taxpayer Clinics (LITCs)
LITCs are independent from the IRS. LITCs represent in-
dividuals whose income is below a certain level and need
to resolve tax problems with the IRS, such as audits, ap-
peals, and tax collection disputes. In addition, LITCs can
provide information about taxpayer rights and responsibili-
ties in different languages for individuals who speak Eng-
lish as a second language. Services are offered for free or
a small fee for eligible taxpayers. To find an LITC near
you, go to TaxpayerAdvocate.IRS.gov/about-us/Low-
Income-Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low
Income Taxpayer Clinic List.
Publication 974 (2021) Page 79
To help us develop a more useful index, please let us know if you have ideas for index entries.
See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.Index
A
Abandonment 7
Advance payment of the premium
tax credit (APTC) 3
Allocation of policy amounts 28
Divorced or legally separated 28
Married but not filing a joint
return 33
Two or more taxpayers 37
Alternative calculation for year of
marriage 38, 44
Alternative family size 38
Applicable taxpayer 7
Assistance (See Tax help)
C
Coverage family 6
D
Domestic abuse 7
E
Employer-sponsored plans 10
Expatriate health plans 8
G
Government-sponsored
programs 9
H
Household income 6
I
Individual market plans 9
Individuals lawfully present 20
Individuals not lawfully present 19
Individuals who are incarcerated 7
Iterative calculation method 63
M
Married filing separately 8
Married taxpayers 7
Minimum essential coverage 8
Modified AGI 6
Monthly credit amount 6
N
Nonspecified premiums 58
O
Other coverage 19
P
Premium tax credit (PTC) 3, 4
Publications (See Tax help)
Q
Qualified health plan 7
S
Second Lowest Cost Silver Plan
(SLCSP) 27
Self-employed health insurance
deduction 57
Simplified calculation method 65,
SLCSP:
Premium tools 27
Specified premiums 59
Spousal abandonment 8
T
Tax family 4
Tax help 76
Page 80 Publication 974 (2021)