Form 8962 and Schedule A (Form 1040) - Medical Expenses
1

Insurance premiums paid to the Marketplace are eligible as medical expenses on line 1 of Federal Schedule A Itemized Deductions (as long as you have not been reimbursed in any way for that expense).

The TaxAct program will automatically transfer the appropriate amount based on the entries made on Form 1095-A Health Insurance Marketplace Statement (which are transferred to Form 8962 Premium Tax Credit (PTC)).  The amount transferred to Schedule A as a medical expense is the net amount from Form 8962 (the amount from column A (Annual Enrollment Premiums) less the amount from column F (Annual Advance Payment of PTC)).

If the return ultimately contains an Excess Advance Premium Tax Credit Repayment amount (line 29 of Form 8962 which transfers to line 2 of Schedule 2 (Form 1040)), an Alert in the program will prompt you to enter the appropriate amount to increase the medical expense amount on Federal Schedule A. The text in the Alert explains the amount to enter and should be entered exactly as shown and will then appropriately increase the medical expense on Schedule A.

If the return ultimately contains a Net Premium Tax Credit amount (line 26 of Form 8962 which transfers to line 70 of Schedule 3 (Form 1040)), an Alert in the program will prompt you to enter the appropriate amount to decrease the medical expense amount on Federal Schedule A.  The text in the Alert explains the amount to enter and should be entered exactly as shown and will then appropriately reduce the medical expense on Schedule A.

Per IRS Publication 502, Medical and Dental Expenses, page 13:

Premium Tax Credit

You can't include in medical expenses the amount of health insurance premiums paid by or through the premium tax credit. You also can't include in medical expenses any amount of advance payments of the premium tax credit made that you did not have to pay back. However, any amount of advance payments of the premium tax credit that you did have to pay back can be included in medical expenses.

To run the Alerts in the TaxAct program:

  1. From within your TaxAct return (Online or Desktop), click Review.
  2. Click Continue. On the next page, click Run the review
  3. Continue through the alert screens until you reach the screen titled Alerts Completed