Form 1095-A Received But Insurance Never Used

If your client received Form 1095-A but never used the insurance, they still need to file Form 8962 to reconcile any advance premium tax credit (APTC) that was paid to the insurance provider on their behalf.

Form 8962 Requirement:

Form 8962 must be filed if APTC was paid for an individual in the taxpayer's tax family, regardless of whether the insurance was actually used. [1] The Marketplace issues Form 1095-A to report any APTC that was paid to the health plan provider, and this amount must be reconciled with the allowable premium tax credit for the year. [2]

Repayment Consequences:

If APTC was paid but your client wasn't entitled to the premium tax credit (because they didn't use the coverage), the excess APTC will be treated as an increase in tax. [2] However, one of the requirements to claim the PTC is that the portion of enrollment premiums for which the taxpayer is responsible was paid by the due date of the tax return. [1] If no premiums were paid because the insurance wasn't used, your client likely won't qualify for any PTC and will need to repay the full APTC amount, subject to repayment limitations based on household income.