The American Rescue Plan, signed into law on March 11, 2021, includes a provision that eliminates the requirement to repay excess advance premium tax credits for tax year 2020. Click here for additional information.

Overview

The IRS issues Letter 12C to inform a taxpayer that their return has been received, but additional information is needed in order to process the return. If your Letter 12C indicates that Form 8962, Premium Tax Credit (PTC) was missing and not attached to your return, you will need to send the completed Form 8962 to the IRS. You do NOT need to amend your return, so there is no need to submit Form 1040-X, Amended U.S. Individual Income Tax Return. Following this process will ensure a faster refund than mailing the 1040-X to the IRS. This procedure only applies to taxpayers who received a Form 1095-A Health Insurance Marketplace Statement.

Sections of Letter 12C

• Header Section - This area contains the notice date, the Notice Number, and your Social Security Number.
• Response Section - The first section of this letter will usually outline the items you need to address in your response and will also include which year’s tax return is being reviewed. Please note you only have 20 days from the date of the letter to respond to the IRS.
  Note. You should send the requested information to the mailing address shown in the top left corner of the letter. Depending on your specific letter, you may also have the option to respond via mail or fax. See the additional response details in the letter for those options, if available. If you have any questions or need additional time to gather any forms or documents, contact the IRS using the appropriate number within the “Contact Information” section. Extending the deadline for responding to the notice is at the discretion of the IRS which is why it is important that you contact them in advance of the indicated deadline.
  Note. As explained within this section, do NOT send a complete copy of your tax return as your response, unless specifically instructed to do so by the IRS. Instead you will only send the requested documents. If you are due a refund, the IRS will issue that refund in six to eight weeks from the date they receive your response. If you do not respond to the notice, the IRS may adjust your return and reduce your refund or increase the tax due, thus requiring additional payment from you.
• Explanation Section - This section is where the IRS will outline what information they need from you and why.
• Contact Information Section - This section of the notice will display multiple phone numbers you may use to contact the IRS. Take note of the phone number descriptions and choose the most appropriate one for your situation.

Purpose of Form 8962

Taxpayers who purchased health insurance from the marketplace and had advance payments of the premium tax credit paid directly to their insurance provider are required to reconcile these advance payments on Form 8962 with their tax return. Taxpayers should use the Form 1095-A provided by their marketplace to fill out Form 8962.

What to send to the IRS

• a completed Form 8962
• a copy of your Form 1095-A
• a newly computed page 2 of your tax return with your original signatures, showing the transferred amount from Form 8962, if applicable.

Where to send requested forms

The IRS mailing address or fax number will appear on the IRS Understanding Your Letter 12C webpage.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.