8962, Part V: Alternative Calculation for Year of Marriage

[Jason A]

HELP! I have exhausted all possibilities on trying to figure out how to get this return to e-file. Spouse had Marketplace coverage for herself from January to December 2024. Married husband 12/03/2024. He had coverage through work, not Marketplace. She finished the month on her own policy as normal and was added to his work plan the following month, 01/01/2025. I've calculated the alternative monthly contribution and received same result after tackling instructions 3 times. I receive same rejection every time:

"Form 8962, Line 36b 'MonthlyContributionAmt' for the Spouse must be euqal to the amount computed using the Form 8962 Instructions.

In other words...

Form 8962, Line 36b 'MonthlyContributionAmt' for the Spouse must be equal to the amount computed using the worksheet provided in the Form 8962 instructions."

It then shows below that, "Fields commonly associated with this error" and has '1' in a red box. I can't find what this means either.

Rejection Error codes: Federal 1040 F8962-011 and Oklahoma STATE-902

 

After extensive research, I'm understanding that even though they didn't marry until December, his income is causing them to repay most of the APTC she received. I've at least got that amount reduced based off of 8962 Instructions and Publication 947 but now can't get it to E-File with the results. 

ANY GUIDANCE WOULD BE APPRECIATED! I'M AT A STAND STILL WITH THIS CLIENT.

 

 

 

[jklcpa]

1 hour ago, Jason A said:

It then shows below that, "Fields commonly associated with this error" and has '1' in a red box. I can't find what this means either.

Do you have a "1" on line 1 for the size of the tax family? If married, that should say "2". 

[TexTaxToo]

I'm not sure this is your problem, but a few more things to check:

• Line 10 should be checked 'No', and you must enter the monthly amounts on lines 12-23, not the annual amounts on line 11, even though all monthly amounts are the same.  Columns a, b, f must be the amounts from the Form 1095-A
• line 35 is blank, line 36a=1, 36c=1, 36d=12, and 36b is your calculated amount
• The values entered on lines 12-23, column c, are all equal to your 36b calculated amount (the software may do this automatically)

[Jason A]

12 hours ago, jklcpa said:

Do you have a "1" on line 1 for the size of the tax family? If married, that should say "2". 

Thank you for responding. yes, I have 'alternative household size' as 1 on line 36a and 2 for line 1 of 8962. I even tried 2 on 36a for giggles and it ATX error says it has to be less then number of exemptions, which is fine. Neither have dependents. It's just the two fo them.

[Jason A]

10 hours ago, TexTaxToo said:

I'm not sure this is your problem, but a few more things to check:

• Line 10 should be checked 'No', and you must enter the monthly amounts on lines 12-23, not the annual amounts on line 11, even though all monthly amounts are the same.  Columns a, b, f must be the amounts from the Form 1095-A
• line 35 is blank, line 36a=1, 36c=1, 36d=12, and 36b is your calculated amount
• The values entered on lines 12-23, column c, are all equal to your 36b calculated amount (the software may do this automatically)

Thank you for replying. That is correct, I have 'yes' on Line 9 and 'no' on Line 10. I have monthly amounts for lines 12-23 with line C matching 36b. 35 is all blank. Columns a, b, and f are all from original 1095-a. 

[Jason A]

[Jason A]

Just now, Jason A said:

They were originally owing $4,476. So, at least I've reduced that number....hopefully. For information purposes, the 1095-A original amounts are $521(a), $395(b), and $373(c).

[TexTaxToo]

Here's what I would get for Worksheet III manually:
1.  1
2.  41068
3.  14580
4.  281
5.  0.0524
6.  2152
7.  179

So my 36b would be 179.  What did you do differently?

[jklcpa]

3 hours ago, Jason A said:

Thank you for responding. yes, I have 'alternative household size' as 1 on line 36a and 2 for line 1 of 8962. I even tried 2 on 36a for giggles and it ATX error says it has to be less then number of exemptions, which is fine. Neither have dependents. It's just the two fo them.

I take back what I said earlier about MFJ should have a "2" on line 1 of the 8962. Line 1 of the 8962 should have a "1" in it for the spouse-only's tax family size that is being used for the alternative calculation.  I think this may be causing your e-file error. Note - I have not reviewed any dollar amount entried that you may be discussing with others here.

Here is a snip from pub 974 about tax family size when using the alternative calculation:

Alternative Family Size
Alternative family size is used to determine an alternative monthly contribution amount (see Monthly contribution amount under Terms You May Need To Know, earlier) on worksheets I and III, which may reduce the amount of excess APTC for the pre-marriage months that you must repay.

When determining your alternative family size, include yourself and any individual in the tax family who qualifies as your dependent for the year under the rules explained in the Instructions for Form 1040 or the Instructions for Form 1040-NR. Do not include any individual who does not qualify as your dependent under those rules or who is included in your spouse’s alternative family size.

When determining your spouse’s alternative family size, include your spouse and any individual in the tax family who qualifies as your spouse’s dependent for the year under the rules explained in the Instructions for Form 1040 or the Instructions for Form 1040-NR. Do not include any individual who does not qualify as your spouse’s dependent under those rules or who is included in your alternative family size.

Note. You may include an individual who qualifies as the dependent of both you and your spouse in either alternative family size.

[TexTaxToo]

17 minutes ago, jklcpa said:

Line 1 of the 8962 should have a "1" in it for the spouse-only's tax family size

Judy, I disagree.  Worksheets I and III should have 1 for the alternative family size (and that may be his problem), but Form 8962 should have 2.

The example on page 44 of Pub 974 makes this clear.  The example has one spouse with no dependents and one spouse with two dependents:

Quote

Paulette and Quentin fill out Form 8962 (not illustrated), lines 1 through 11, as follows.

Line 1. They enter “4” because this is the number of individuals they included in their tax family.

Then on the worksheets:

Quote

Step 1 (Paulette's Worksheet I)

Line 1. They enter “1” as Paulette’s alternative family size

Step 3 (Quentin's Worksheet III)

Line 1. They enter “3” as Quentin's alternative family size consisting of Quentin and his two dependent children.

 

[jklcpa]

2 hours ago, TexTaxToo said:

Judy, I disagree.  Worksheets I and III should have 1 for the alternative family size (and that may be his problem), but Form 8962 should have 2.

Yes, you are correct that it should be "2".

I read again about the separate family size for each that then gets added together for the 8962 line 1 entry.

[Jason A]

On 3/30/2025 at 10:15 AM, TexTaxToo said:

Here's what I would get for Worksheet III manually:
1.  1
2.  41068
3.  14580
4.  281
5.  0.0524
6.  2152
7.  179

So my 36b would be 179.  What did you do differently?

[Jason A]

Thank you for your response! I really appreciate it. I tried your calculations, and it still rejected. Error #F8962-006-01: "If Form 8962, Line 1 'TotalExemptionsCnt' has a non-zero value, then Line 5 'FederalPovertyLevelPct' must be equal to Line 3 'HouseholdIncomeAmt' divided by Line 4 'PovertyLevelAmt'."

I started with household size of 2 to get the Federal Poverty Level at $19,720, which I thought would be correct since there is now 2 in the household. ATX automatically puts '2' on Line 1 of the 8962 based on filers and dependents included on the return, thus making Line 4 an automatic $19,720 from Table 1-1. Then, I continued the 8962 Instructions to page 9, Line 5, Worksheet 2: Household Income as a Percentage of the Federal Poverty Line:

 1.Enter the amount from line 3 of Form 8962 

2.Enter the amount from line 4 of Form 8962

3.Multiply the amount on line 2 by 4.0

4. Is the amount on line 1 more than the amount on line 3? •

Yes. The amount on line 1 above is more than 400% of the federal poverty line. Enter 401 here and on line 5 of Form 8962. • No. Divide the amount on line 1 above by the amount on line 2 above. Do not round; instead, multiply this number by 100 (to express it as a percentage) and then drop any numbers after the decimal point. For example, for 0.9984, enter the result as 99; for 1.8565, enter the result as 185; and for 3.997, enter the result as 399.*

Enter the result here and on line 5 of Form 8962.

[Jason A]

On 3/30/2025 at 2:39 PM, jklcpa said:

Yes, you are correct that it should be "2".

I read again about the separate family size for each that then gets added together for the 8962 line 1 entry.

Thank you for your response. If you have any other thoughts, I'm all ears. See above for my response to other suggested calculations.

[jklcpa]

What program are you using?  Are you overriding entries to try to force the figures to what you expect?  I try to not override unless absolutely necessary.

I entered in a practice return in Drake, so the names and SSNs are fake. Here's what it produced based on your information using the alternative calc for year of marriage. Pdf is 5 pages :

8962 & worksheets.pdf

[jklcpa]

I really didn't have to enter much data. On the main screen where 1095A input goes, I entered the spouse's name and information because she was the only one covered by a marketplace plan and I entered all of the figures for the entire year.

Then I went to another input area and entered as below. Note that system asked for taxpayer's data and months only if enrolled in a marketplace plan, so I didn't enter anything there.  Drake automatically calculates anything with an "=" sign and any entries in those boxes would be considered overrides, so that is why lines 11-23 are blank.

[Jason A]

11 hours ago, jklcpa said:

I really didn't have to enter much data. On the main screen where 1095A input goes, I entered the spouse's name and information because she was the only one covered by a marketplace plan and I entered all of the figures for the entire year.

Then I went to another input area and entered as below. Note that system asked for taxpayer's data and months only if enrolled in a marketplace plan, so I didn't enter anything there.  Drake automatically calculates anything with an "=" sign and any entries in those boxes would be considered overrides, so that is why lines 11-23 are blank.

 

12 hours ago, jklcpa said:

What program are you using?  Are you overriding entries to try to force the figures to what you expect?  I try to not override unless absolutely necessary.

I entered in a practice return in Drake, so the names and SSNs are fake. Here's what it produced based on your information using the alternative calc for year of marriage. Pdf is 5 pages :

8962 & worksheets.pdf 31.54 kB · 2 downloads

Thank you for sending all of that. I woke up to an Acceptance after submitting what happened to be the same thing you show here. LOL. The result ended up being less than prior numbers. As we can see, they still owe some of the excess back, which sucks since she had the plan for the WHOLE year without him being on it or considering his income until December wedding. I am a licensed insurance agent and write these policies too here in OK. It's surprising to me how many still don't explain this to the clients or make sure they understand the risk of using it without having proper numbers. In this case, though, she used proper numbers, but wasn't explained how she can still pay back some of the APTC.

 

Regardless, having help on this site and getting the acceptance this morning has boosted my mood knowing this isn't hanging around my head anymore! THANK YOU! THANK YOU! THANK YOU!

[Jason A]

On 3/30/2025 at 10:15 AM, TexTaxToo said:

Here's what I would get for Worksheet III manually:
1.  1
2.  41068
3.  14580
4.  281
5.  0.0524
6.  2152
7.  179

So my 36b would be 179.  What did you do differently?

I received the Approval on the e-filing this morning with these results. THANK YOU! THANK YOU! THANK YOU for your help! The $179 from both of your calculations is what helped lead me to it. SO GRATEFUL FOR YOU ALL!