The American Rescue Plan Act of 2021, enacted on March 11, 2021, suspended the repayment of excess advanced premium tax credit (APTC) amounts for tax year 2020.

If you have already filed your 2020 tax return and had excess APTC, you do not need to file an amended tax return or contact the IRS. The IRS will reduce the excess APTC repayment amount to zero with no further action needed by you. The IRS will reimburse you for the excess advance Premium Tax Credit you paid on your 2020 tax return. Taxpayers who received a letter about a missing Form 8962 should disregard the letter if they have excess APTC for 2020. The IRS will process tax returns without Form 8962 for tax year 2020 by reducing the excess advance premium tax credit repayment amount to zero.

Again, IRS is taking steps to reimburse people who filed Form 8962, reported, and paid an excess advance Premium Tax Credit repayment amount with their 2020 tax return before the recent legislative changes were made. Taxpayers in this situation should not file an amended return solely to get a refund of this amount.

If you have not filed your 2020 tax return, you should prepare and file your return as described below. Be sure to e-file if you can; see www.irs.gov/FreeFile.

Complete Form 8962 through line 25.

  • If your total premium tax credit (PTC), line 24, is greater than the APTC on line 25, then nothing has changed; you are eligible for a net premium tax credit. Complete line 26, report the line 26 amount on Schedule 3 (Form 1040), line 8, and file Form 8962 with your return.
     
  • If your total PTC on line 24 is less than your APTC on line 25, then you are not eligible for the net premium tax credit. However, you don’t have to repay the excess amount. Do not file Form 8962 with your return. The amount that you would have entered on Form 8962, line 29, is the amount of your APTC that you are now not required to repay due to the American Rescue Plan. Do not complete Part III of Form 8962, and do not follow the instructions for that part. Leave line 2 of Schedule 2 (Form 1040) blank.

See IR-2021-84 for more details.