Updated November 5, 2026. Quick answer: Worksheet C in Publication 974 (2025) is for a taxpayer who divorced or legally separated during the year and has to share a marketplace health plan’s policy amounts both with the former spouse and with a third taxpayer. It takes the percentage you and your former spouse agreed on, removes what the third taxpayer receives, and gives the one decimal that goes in columns (e), (f) and (g) of Form 8962, Part IV.
When Worksheet C applies
The publication says “Use this allocation method if you divorced or legally separated during the year and you must allocate policy amounts (enrollment premiums, applicable SLCSP premiums, and APTC) with your former spouse as well as with another taxpayer who is including in their tax family an individual enrolled in a qualified health plan with members of your and your former spouse’s tax families.” The case it has in mind is a plan that covered a married couple and their children, where a child then moves in with a grandparent who claims the child. The third taxpayer uses Worksheet D instead.
This is Part IV of Form 8962. The line-by-line view of that part is on the Form 8962 lines 30 to 34 page.
Step 1 and Step 2: the two percentages
Step 1 is with your former spouse: “You and your former spouse can allocate these amounts using any percentage you agree on”, and “you must allocate all amounts using the same percentage”. If you cannot agree, “your former spouse must allocate 50% of each of these amounts to each of you”.
Step 2 is separate from the first and is with the third taxpayer. “You may use the percentage you agreed on for every month that this allocation rule applies, or you may agree on different percentages for different months.” One limit applies: “you must use the same allocation percentage for all policy amounts (enrollment premiums, applicable SLCSP premiums, and APTC) in a month”.
When no agreement is reached with the third taxpayer, the fallback is a head count: “the allocation percentage is equal to the number of individuals the other taxpayer includes in their tax family for the tax year who were enrolled in the plan for which you are allocating policy amounts, divided by the total number of individuals enrolled in the qualified health plan.” The publication adds “You and your former spouse must compute the PTC and reconcile APTC using the remaining amounts.”
Lines 1 to 5
| Line | What it asks |
|---|---|
| 1 | “Enter as a decimal your percentage from Step 1 above” |
| 2 | “Enter 1.0” |
| 3 | “Enter as a decimal the total of the percentage(s) from Step 2 above allocated to the other taxpayer(s).” |
| 4 | “Subtract line 3 from line 2” |
| 5 | “Multiply line 1 by line 4. Enter the result as a decimal. This is your allocation percentage.” |
Line 3 has a note about adding percentages when more than one other taxpayer is involved; the Kara example below shows it with two. Line 5 is the figure Step 4 asks for.
Step 4: what goes in Form 8962, Part IV
“If you use the same percentage in Step 2 above for every month to which this allocation method applies, use only one of lines 30 through 33 in Part IV to report the allocation.” “If you use different percentages for different months under Step 2, use a separate line in Part IV for each allocation percentage.”
| Column | What goes in it |
|---|---|
| (a) | “Enter the Marketplace-assigned policy number from Form 1095-A, line 2.” “If the policy number on the Form 1095-A is more than 15 characters, enter only the last 15 characters.” |
| (b) | “Enter the SSN of your former spouse.” |
| (c) | “Enter the first month you are allocating policy amounts.” The example in the publication: January through June is 01 in column (c). |
| (d) | “Enter the last month you are allocating policy amounts.” The same example puts 06 in column (d). |
| (e), (f), (g) | “Enter the decimal from Worksheet C, line 5.” |
The IRS example 1: Kara and David
The publication’s first example is “Kara and David were married at the beginning of 2025 and have two children, Meredith and Sam.” The policy amounts each month were “the enrollment premiums were $700, the applicable SLCSP premium for a coverage family of four was $650, and the APTC was $425”. They divorced in September, and the children moved in with their grandmother Lydia in May. Kara and David agree on “30% to Kara and 70% to David”. Kara and Lydia agree on 80% to Lydia, and David and Lydia agree on 50% to Lydia. Kara’s worksheet, recomputed:
| Line | Entry | Value |
|---|---|---|
| 1 | Percentage Kara and David agreed in Step 1 | 0.30 |
| 2 | Enter 1.0 | 1.0 |
| 3 | Percentage Kara agreed with Lydia in Step 2 | 0.80 |
| 4 | Line 2 minus line 3 (computed) | 0.20 |
| 5 | Line 1 times line 4 (computed) | 0.06 |
Line 5 is 0.06, entered in columns (e), (f) and (g) of line 30, with 01 and 09 for the months and David’s SSN in column (b). Her allocated monthly amounts are $42 of enrollment premium, $39 of applicable SLCSP premium and $26 of APTC (each computed as the policy amount times 0.06).
David’s worksheet, recomputed:
| Line | Entry | Value |
|---|---|---|
| 1 | Percentage David and Kara agreed in Step 1 | 0.70 |
| 2 | Enter 1.0 | 1.0 |
| 3 | Percentage David agreed with Lydia in Step 2 | 0.50 |
| 4 | Line 2 minus line 3 (computed) | 0.50 |
| 5 | Line 1 times line 4 (computed) | 0.35 |
His line 5 is 0.35, giving monthly amounts of $245, $228 and $149 (computed). Lydia’s share is on Worksheet D.
The IRS example 2: two other taxpayers
In the second example “in May, Meredith moved in with her grandmother, Lydia, and Sam moved in with his aunt, Kimberly.” Kara and David now agree on 40% and 60%. Kara agrees to give 50% to Lydia and 25% to Kimberly; David agrees to give 20% to Lydia and 25% to Kimberly. Line 3 is the total of the two, as the note under the line asks.
Kara’s worksheet:
| Line | Entry | Value |
|---|---|---|
| 1 | Percentage Kara and David agreed in Step 1 | 0.40 |
| 2 | Enter 1.0 | 1.0 |
| 3 | Kara’s percentages with Lydia and Kimberly added (0.50 plus 0.25, computed) | 0.75 |
| 4 | Line 2 minus line 3 (computed) | 0.25 |
| 5 | Line 1 times line 4 (computed) | 0.10 |
David’s worksheet:
| Line | Entry | Value |
|---|---|---|
| 1 | Percentage David and Kara agreed in Step 1 | 0.60 |
| 2 | Enter 1.0 | 1.0 |
| 3 | David’s percentages with Lydia and Kimberly added (0.20 plus 0.25, computed) | 0.45 |
| 4 | Line 2 minus line 3 (computed) | 0.55 |
| 5 | Line 1 times line 4 (computed) | 0.33 |
The two allocation percentages, 0.10 and 0.33, plus Lydia’s 0.32 and Kimberly’s 0.25 add up to 1.00 (computed). The same holds in the first example: 0.06 plus 0.35 plus 0.59 is 1.00 (computed). That is a useful check that every taxpayer on the policy used consistent agreements.
Example with invented numbers
Illustration, not an IRS example. The percentages are made up and every result is computed.
| Line | Entry | Value |
|---|---|---|
| 1 | Percentage you and your former spouse agreed in Step 1 (invented) | 0.60 |
| 2 | Enter 1.0 | 1.0 |
| 3 | Percentage you agreed with the other taxpayer in Step 2 (invented) | 0.25 |
| 4 | Line 2 minus line 3 (computed) | 0.75 |
| 5 | Line 1 times line 4 (computed) | 0.45 |
The other former spouse, with an agreed share of 0.40 and the same 0.25 given to the third taxpayer, gets 0.30 on line 5 (computed). The third taxpayer’s Worksheet D then comes to 0.25 (computed), and the three add up to 1.00.
Edition
This page reads Publication 974 (2025), Premium Tax Credit (PTC), the file irs.gov served on 2026-11-05. Worksheet letters and line numbers belong to that edition, so check the label printed on the worksheet in your own copy before you follow a line reference.
Common mistakes
- Entering your Step 2 percentage on line 5 instead of subtracting it on line 3 and multiplying. Line 5 is your Step 1 share of what the third taxpayer leaves.
- Using a different percentage for the premium than for the APTC in the same month. The publication requires one percentage for all policy amounts in a month.
- Putting the third taxpayer’s SSN in column (b). Column (b) is your former spouse’s SSN.
- Forgetting that line 3 adds all Step 2 percentages when there is more than one other taxpayer, as in Kara’s worksheet in the second IRS example.
Related: Form 8962 lines 30 to 34, Worksheet D, and Publication 974.
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Answer againSources
- Publication 974 (2025), Premium Tax Credit (PTC): https://www.irs.gov/pub/irs-pdf/p974.pdf
- IRS, About Publication 974, Premium Tax Credit (PTC): https://www.irs.gov/forms-pubs/about-publication-974
Read from the IRS documents linked above on November 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.