This year TaxAct implemented an e-file qualification that prevents you from filing Form 8962 if Pub 974, Worksheet X is being used on line 28. This was done because IRS business rules do not allow for this scenario and if it were e-filed you would see e-file rejection error F8962-043-02.

Rejection code F8962-043-02 states:

If Form 8962, 'TotalExemptionsCnt' (line 1) has a non-zero value, then 'AdditionalTaxLimitationAmt' (line 28) must be equal to the tax limitation amount from the Repayment Limitation table (see Form 8962 instructions) based on 'FederalPovertyLevelPct' and the filing status on the return.

When IRS Pub 974, worksheet X is being used, a different repayment limitation is used on line 28 so the amount will NOT be equal to the amount in the table from Form 8962 instructions; it will violate this business rule.

This is a return that requires paper filing. This is a return that requires paper filing. The corresponding state return also needs to be paper-filed (with the exception of CA).