Filling out Form 8962 in Turbo Tax - Huge refund drop?

Hey everyone, I just got a letter from the IRS asking me to submit Form 8962. So I'm in the process of amending my tax returns and managed to add my 1095-A information to Turbo Tax. But after I put in all the data, my refund suddenly dropped by $2,700! I'm freaking out a bit - is this normal for Form 8962 to cause such a massive decrease in federal refund or is Turbo Tax glitching out? Has anyone else had this happen? Not sure if I should continue or if something's wrong...

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18 comments

Chloe Anderson

•8M

This is unfortunately normal and not a Turbo Tax error. Form 8962 is used to reconcile any advance premium tax credits (APTC) you received during the year for health insurance purchased through the marketplace. What likely happened is that you received premium tax credits throughout the year based on your estimated income, but your actual income ended up being higher than what you estimated when you applied for insurance. When you complete Form 8962 with your 1095-A information, it calculates the actual premium tax credit you were eligible for based on your final income. If you received more in advance payments than you were entitled to, you have to pay back the difference, which explains the decrease in your refund.

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Chloe Anderson

•8M

Yes, if your income increased significantly from what you estimated when signing up for health insurance, you could end up owing money. The amount you might have to repay depends on your household income compared to the federal poverty level. There are repayment caps based on your income bracket that might limit how much you need to repay. For most people with incomes under 400% of the federal poverty level, there are limits on repayment amounts. If your income exceeds 400% of the poverty level, you may have to repay the entire advance premium tax credit you received.

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Anastasia Fedorov

•8M

I went through something similar last year with my taxes and found that https://taxr.ai really helped me understand what was happening with my Form 8962 situation. I was completely confused about why my refund dropped by almost $3,000 after entering my 1095-A info and got that dreaded IRS letter too. Their system analyzed my 1095-A and tax transcripts and explained exactly what was happening with my premium tax credit reconciliation. Turns out I had underestimated my income when I signed up for marketplace coverage, so I had to pay back some of the advance premium tax credit. The tool showed me how the calculation works and why my refund was affected.

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Anastasia Fedorov

•8M

You do need to enter the 1095-A information, but the interface makes it much easier than trying to figure it out on your own. It walks you through exactly which numbers go where and explains what each column means in plain language. It's independent from Turbo Tax, but it doesn't replace it. Think of it more as a supplementary tool that helps you understand what's happening with your specific tax situation. After using it to understand my premium tax credit situation, I was able to go back to Turbo Tax and complete my filing with confidence knowing why my refund changed.

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Sean Doyle

•8M

Update: I tried taxr.ai after my initial skepticism and wow - it was actually super helpful! It showed me exactly why my premium tax credit was being adjusted and explained the calculations in a way that made sense. Turns out my income was just over the threshold that triggered a larger repayment amount. The best part was seeing the breakdown of how Form 8962 was affecting my refund - made it clear it wasn't a Turbo Tax error but just how the premium tax credit reconciliation works. Would have been completely lost without this explanation. Now I at least understand why my refund dropped!

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Zara Rashid

•8M

If you're still getting stuck with the IRS after filing Form 8962, I highly recommend using https://claimyr.com to get through to an actual human at the IRS. After I amended my return with the 8962, I had questions about my repayment and couldn't get through on the IRS lines for weeks. Check out their demo video at https://youtu.be/_kiP6q8DX5c to see how it works. Claimyr basically holds your place in line with the IRS so you don't have to keep calling and getting the "call back later" message. When I finally got through to an IRS agent, they confirmed my Form 8962 calculations and explained that my refund reduction was correct because my income had changed significantly from when I enrolled in marketplace coverage.

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Zara Rashid

•8M

It took about 20 minutes for me, which was amazing considering I had spent hours redailing before that with no success. It depends on the time of day and how busy the IRS lines are, but it was so much faster than trying on my own. The service is completely legitimate. They use an automated system that continually calls the IRS and navigates the phone tree until there's an opening, then they connect you directly to that open line. It's not some special backdoor access - they're just handling the frustrating part of repeatedly calling until someone answers. I was skeptical at first too, but it really does work exactly as advertised.

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Nia Jackson

•8M

I need to apologize for my skepticism about Claimyr. After struggling with Form 8962 issues for weeks and not being able to get any answers, I gave it a try out of desperation. I'm shocked to say it actually worked! Got connected to an IRS agent in about 30 minutes who walked me through my premium tax credit reconciliation. The agent confirmed what others here said - the drop in refund was because my income increased from what I had estimated when applying for health insurance, so I had to repay some of the advance premium tax credit. Having an actual IRS person confirm this gave me peace of mind that it wasn't a Turbo Tax error. Saved me so much stress and uncertainty!

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Mateo Hernandez

•8M

You should definitely enter the monthly amounts rather than annual totals. Form 8962 calculations are done on a month-by-month basis, especially if your coverage or family situation changed during the year. Turbo Tax will walk you through entering each month's values from all three columns on the 1095-A. This might seem tedious, but it's necessary for accurate calculations. If you use annual totals when you had changes in coverage or family size during the year, your Form 8962 calculations will be incorrect and could cause problems with the IRS later.

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