Marketplace insurance and the premium tax credit
A self-purchased marketplace health plan and a Form 1095-A. The work is reconciling the advance premium tax credit on Form 8962: income as a percent of the poverty line drives the whole calculation.
Taxpayer facts
Who this is and what their year looked like.
Larissa is single, lives in Tampa, Florida, and buys her health insurance through the marketplace (no employer coverage). She got advance premium tax credits during the year.
At tax time she receives Form 1095-A and must reconcile the advance credit against the credit she actually qualifies for, based on her final income.
- NameLarissa M. Ford
- Date of birth09/12/1992
- SSN267-41-5539
- Age (as of 12/31/2025)33
- Filing statusSingle
- DependentsNone (household size 1)
- OccupationDental hygienist (small employer, no health plan)
- Household income (MAGI)$30,120
- Address2601 W Kennedy Blvd, Apt 5, Tampa, FL 33609
- ResidencyFlorida, full year (no state income tax)
Source documents
Work from these the way you would a real client's paperwork. Everything is fictional.
Objectives
What a correct return should capture.
- Figure household income (modified AGI) and divide it by the 2024 federal poverty line for her household size to get the Form 8962 line 5 percentage.
- Look up the applicable figure for that percentage in the 2025 Form 8962 table and multiply it by household income for her expected contribution.
- Compute the allowed credit: the benchmark premium on her 1095-A (column B) less her contribution, never more than the premium she actually paid (column A).
- Reconcile it against the advance credit already paid to the insurer (column C). An additional credit goes to Schedule 3; an excess is repaid on Schedule 2, up to the 2025 repayment limit.
- Finish the return: wages less the 2025 standard deduction for a single filer, then the income tax, the withholding and the net credit, down to the refund or balance due.
- Note the 2025 rules (no 400%-of-poverty-line cutoff, contribution capped at 8.5% of income) and that Florida has no state income tax.
Check your work
The answer key and the complete return, the way a real client receives it: the 1040 and its schedules, the workpapers behind every number, and the signature forms.
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