IRS Notice CP 6

A CP 6 notice, written by the IRS as CP06 and sometimes CP06A, means the IRS is examining the Premium Tax Credit you claimed and is holding all or part of your refund until you prove the credit was correct. The Premium Tax Credit is the subsidy that lowers the cost of a health plan bought through the Marketplace, and the IRS reconciles it on Form 8962 against the advance payments your insurer received during the year. When something on that reconciliation does not match the agency’s records, a CP 6 notice goes out asking for documentation. It is a targeted audit of one item, not a full examination of your whole return, but it does freeze your refund while it runs.

The reason a CP 6 lands in your mailbox usually comes down to a mismatch between the figures on your Form 8962 and the Form 1095-A the Marketplace filed. The 1095-A reports your monthly premiums, your second lowest cost silver plan benchmark, and the advance Premium Tax Credit paid on your behalf. If your Form 8962 reports household income, family size, or monthly amounts that do not line up with the 1095-A, the IRS cannot confirm the credit, so it issues the CP 6 and asks you to substantiate what you claimed. The notice is the agency saying prove it before we release the money.

Here is a worked example. A freelance writer in Brooklyn bought a Marketplace plan and estimated her 2024 income at 38,000 dollars when she enrolled, which set her advance Premium Tax Credit at about 4,800 dollars for the year. She actually earned 41,000 dollars, close but not identical, and her Form 8962 reflected the higher figure. The IRS, cross checking against the 1095-A, flagged the gap and sent a CP 6 notice holding her 1,900 dollar refund until she submitted documentation confirming her income and her Marketplace coverage. The credit was largely correct. The IRS simply wanted proof before paying out.

We see this every year. People treat a CP 6 like a bill and start panicking about owing money, when in fact the notice is a request for documents, not a demand for payment. Often the credit holds up fine once you send the paperwork, and the held refund is released in full. The mistake is ignoring the 30 day window or sending incomplete records, which turns a routine verification into a proposed assessment. Read the notice as a homework assignment with a deadline, not a verdict.

One edge case matters. If your actual income came in higher than your Marketplace estimate, you may owe back some of the advance credit, a repayment that flows through Form 8962. The CP 6 may be the moment that repayment surfaces. That repayment is not a penalty. It is simply the difference between the advance credit your insurer already received and the smaller credit your real income supports. Knowing that distinction keeps you calm when the CP 6 arrives, because a modest repayment on a credit that was mostly correct is a very different problem from a disallowed credit on a return you never documented. The notice tells you which situation you are in if you read the figure carefully. Compare the credit you actually claimed on your Form 8962 against the advance amount on your 1095-A. If the two are close, expect a small adjustment at most. If they are far apart, prepare for a larger reconciliation, but either way the CP 6 is the place to settle it cleanly. The IRS explains the notice at Understanding your CP06 and CP06A notice and the reconciliation at Premium Tax Credit reconciliation. If a CP 6 has your refund frozen and you are unsure whether your credit holds up, our IRS audit, refund and notice assistance team handles the response. Start with our new client inquiry form.

You got a CP 6 notice because the IRS could not automatically confirm the Premium Tax Credit on your return and decided to verify it before releasing your refund. The most common trigger is a discrepancy between your Form 8962 and the Form 1095-A the Health Insurance Marketplace filed about your coverage. Those two documents have to tell the same story about your premiums, your benchmark plan, your household income, and the advance credit paid. When they diverge, even slightly, the IRS holds the refund and sends a CP 6 asking you to back up the numbers.

There are a few specific reasons the figures diverge. The first is an income estimate that did not match reality. When you enrolled through the Marketplace, you projected your income to set the advance credit, and if your actual income on the return differs, the reconciliation on Form 8962 changes the credit, which can flag a CP 6. The second is a household size change, a marriage, a birth, a dependent who aged off, any of which alters the credit calculation. The third is a missing or unreported Form 1095-A, where you simply did not enter the Marketplace data, leaving the IRS unable to match anything.

Timing and paperwork drive most of these. The Marketplace sends your 1095-A in January, and the IRS receives its own copy. If you filed before your 1095-A arrived, or entered the wrong monthly amounts from it, the mismatch is baked into your return and a CP 6 follows. The notice is not an accusation of fraud. It is the system catching a data mismatch and asking you to resolve it with documents. Most CP 6 cases are honest discrepancies, not deliberate errors. The IRS knows this, which is why the CP 6 asks for documents rather than accusing you of anything. The agency is reconciling two data sets that often drift apart for ordinary life reasons, a raise, a new baby, a job change mid year. Your job is to close the gap with paper, not to defend yourself against a charge. Once you reframe the CP 6 as a reconciliation rather than an accusation, the response becomes a clerical task with a deadline instead of a confrontation. That mental shift also stops people from making it worse. Taxpayers who treat the CP 6 as a fight sometimes fire off angry letters without the documents the IRS actually asked for, which accomplishes nothing and burns the clock. The documents do the talking. A clean Form 8962 and a matching 1095-A resolve more CP 6 cases than any argument ever will.

Here is a concrete example. A married couple in Astoria had a baby in 2024, which increased their family size from two to three and changed their Premium Tax Credit. Their Form 8962 reflected the larger family, but the Marketplace 1095-A had not been updated mid year, so the advance credit on record was calculated for a household of two. The IRS saw the mismatch, could not reconcile the family size automatically, and issued a CP 6 asking for documentation of the birth and the corrected household. Once they sent the birth certificate and the updated calculation, the credit was confirmed and the refund released.

We see this every year. The most frequent cause is a taxpayer who never entered their 1095-A at all, either because they forgot they had Marketplace coverage for part of the year or because the form arrived after they filed. If you had any Marketplace coverage, the 1095-A is mandatory on the return, and leaving it off almost guarantees a CP 6. The IRS explains the matching at Understanding your CP06 and CP06A notice and what the 1095-A reports at The Health Insurance Marketplace. If you want a professional to reconcile your 1095-A and Form 8962 before a CP 6 ever issues, our individual tax return preparation service catches these mismatches up front.

A CP 6 notice gives you 30 days from the date printed on the letter to send the requested documentation, and the IRS holds all or part of your refund until the verification is complete. The 30 day clock is the number that matters most. Miss it and the IRS does not simply close the file. It moves forward with a proposed change to your return based on the information it already has, which usually means disallowing some or all of the Premium Tax Credit and adjusting your refund downward. So the deadline on a CP 6 is a hard one, and the safest move is to respond well before it.

On how much is held, that depends on your return. The CP 6 freezes the portion of your refund tied to the Premium Tax Credit under review. If your entire refund flows from the credit, the whole refund is held. If your refund comes from a mix of withholding, other credits, and the Premium Tax Credit, the IRS may hold only the slice connected to the credit and release the rest, though in practice it often holds the full refund until the matter resolves. The notice itself tells you the amount in question, so read the figure on your specific CP 6 rather than guessing.

Let me put numbers on it. Suppose your return claims a 3,200 dollar refund, made up of 1,400 dollars of excess withholding and a 1,800 dollar Premium Tax Credit reconciliation in your favor. A CP 6 questioning the credit could hold the full 3,200 dollars while it verifies, or in some cases release the 1,400 dollars of withholding and hold the 1,800 dollars tied to the credit. Either way, the 1,800 dollars stays frozen until you prove the credit. If you respond inside the 30 days with a clean Form 8962 and your 1095-A, that 1,800 dollars is typically released within a few weeks of the IRS accepting your documents.

The cost of missing the deadline is concrete. If you let the 30 days lapse, the IRS issues an updated audit report disallowing the credit, which can convert your refund into a balance due if the advance Premium Tax Credit you received exceeds what you were entitled to. At that point penalties and interest under IRC section 6662 can attach to the underpayment. A notice that started as a simple request for your 1095-A turns into an assessment, all because the documentation arrived late or never came. The difference in cost is stark. Respond on time and you typically get your held refund released in full or with a small adjustment. Let the deadline pass and the same credit becomes a denied credit, the refund becomes a balance due, and penalties stack on top. The 30 day window is the cheapest moment in the entire CP 6 process, and it only gets more expensive from there. Treat the date on the notice as the real deadline, not a suggestion. If you genuinely need more time, call the number on the CP 6 before the deadline rather than after, because the IRS is far more willing to grant an extension to someone who asks in advance than to someone who simply goes quiet. A short call early can buy you the breathing room to assemble a complete response instead of a rushed partial one.

We see this every year. Taxpayers set the CP 6 aside meaning to gather documents later, the 30 days slip by, and the held refund becomes a denied credit. Calendar the deadline the day the CP 6 arrives and send everything at once, because partial responses restart the back and forth and eat the clock. The IRS spells out the 30 day requirement at Understanding your CP06 and CP06A notice and the credit reconciliation at Premium Tax Credit reconciliation. If the deadline is close and you are still hunting for documents, our tax compliance team can assemble and submit the response fast.

You respond to a CP 6 notice by sending the IRS a completed Form 8962 along with the supporting documents it lists, usually itemized on the enclosed Form 14950, Premium Tax Credit Verification. The core of any CP 6 response is three things. First, your Form 1095-A from the Marketplace showing monthly premiums, the benchmark plan, and the advance credit paid. Second, a correctly completed Form 8962 reconciling that advance credit against what you were entitled to based on your actual income and family size. Third, proof of the income and household figures you used, which might be pay records, a profit and loss statement, or documentation of a dependent. Send all of it together in one package.

The fastest channel is the IRS Document Upload Tool, where you scan and submit everything electronically and get confirmation it was received. That beats mail, which adds delivery time to an already tight 30 day window. If you do mail it, use the address on the CP 6 and keep proof of mailing. Whichever channel you pick, make the documents easy to read, label them clearly, and include a copy of the CP 6 notice itself so the IRS can match your response to the right case. Disorganized submissions are the main reason a CP 6 drags on past one round.

Here is a worked example of a clean response. A graphic designer in Long Island City got a CP 6 holding her 2,100 dollar refund over a Premium Tax Credit question. Her income had come in at 44,000 dollars against a Marketplace estimate of 40,000 dollars. She pulled her 1095-A, recompleted Form 8962 with the accurate 44,000 dollar figure, which slightly reduced her credit and her refund to 1,750 dollars, attached her year end profit and loss statement as income proof, and uploaded all three through the Document Upload Tool with a copy of the CP 6. Three weeks later the IRS accepted the corrected figures and released the 1,750 dollars.

We see this every year. The biggest response mistake is sending only part of what the CP 6 asks for, say the 1095-A without a recalculated Form 8962, or income proof without the 1095-A. A partial response forces the IRS to come back for more, the clock keeps running, and the refund stays frozen longer. The second mistake is sending illegible phone photos of crumpled documents. Clean scans matter. Match the figures on your Form 8962 exactly to the 1095-A, line for line, before you submit. Pay special attention to the monthly columns. The 1095-A breaks out each month of coverage separately, and Form 8962 can be completed on an annual basis only when your coverage and family situation were stable all year. If anything changed mid year, you generally have to complete the monthly calculation, and a CP 6 is often triggered precisely because someone used the annual shortcut when the monthly method was required. Check which method your situation calls for before you recompute the form.

If your recalculation shows you actually owe back some advance credit, send the response anyway with the corrected Form 8962, because hiding from the CP 6 only converts a manageable repayment into an assessment with penalties. Honest correction is always cheaper than a forced adjustment. The IRS describes the documents to send at Understanding your CP06 and CP06A notice, the form itself at About Form 8962, and the upload tool at IRS Document Upload Tool. If you would rather have a professional build and submit the whole package, our IRS audit, refund and notice assistance team does exactly that. Reach us through the new client inquiry form.

If you ignore a CP 6 notice, the IRS does not drop the matter. After the 30 day window closes with no response, it issues an updated audit report proposing to disallow the Premium Tax Credit you could not substantiate, and it adjusts your return accordingly. Because the advance Premium Tax Credit was already paid to your insurer on your behalf, disallowing the credit usually means you have to repay that advance, which can flip your expected refund into a balance due. The frozen refund you were waiting on disappears, replaced by a bill. All of that flows from not answering the CP 6.

The mechanics of the repayment run through Form 8962 and the excess advance Premium Tax Credit repayment rules. If your actual income turned out higher than your Marketplace estimate, the law caps the repayment for lower income households but not for those above 400 percent of the federal poverty line, who may have to repay the entire advance credit. So ignoring a CP 6 when your income rose during the year can be expensive, because the unsubstantiated credit becomes a full repayment plus penalties and interest under IRC section 6662 if the underpayment is large enough.

Here is a worked example of the downside. A consultant in Manhattan received a 5,200 dollar advance Premium Tax Credit during 2024 based on a projected income of 45,000 dollars. He actually earned 62,000 dollars, which sharply reduced the credit he was entitled to. A CP 6 arrived questioning the credit, and he ignored it. The IRS disallowed the excess, and because his income reconciliation showed he should have received only about 2,000 dollars of credit, he had to repay roughly 3,200 dollars. Add a 20 percent accuracy penalty on the underpayment and interest, and a notice he could have resolved with a corrected Form 8962 cost him close to 3,900 dollars.

There is also the scenario where you respond but genuinely cannot prove the full credit, perhaps because your income records are incomplete or your Marketplace coverage was partial. In that case, send what you have and the corrected Form 8962 showing your best honest figures. The IRS will adjust the credit to what you can substantiate rather than disallowing it wholesale, and you avoid the accuracy penalty that attaches to a non response. Partial proof beats no proof, every time, because the agency rewards a good faith reconciliation over silence. A documented, honest correction also protects you from the accuracy penalty, which the IRS generally will not assess when you make a reasonable effort to reconcile. Silence removes that protection entirely. So even on your worst CP 6 day, when the numbers clearly moved against you, sending the corrected Form 8962 with whatever records you have is the move that limits the damage. The taxpayers who get hurt most are the ones who, fearing bad news, send nothing at all.

We see this every year. Someone assumes that because they cannot fully document the credit, there is no point responding to the CP 6, so they let it lapse, and the IRS disallows the entire credit and assesses the full repayment. Even an imperfect response limits the damage. If the math genuinely turns against you, knowing it early lets you set up a payment plan instead of facing a levy later. The IRS explains the consequences at Understanding your CP06 and CP06A notice and the repayment limits at Premium Tax Credit reconciliation. If a CP 6 has turned into a proposed repayment you are not sure is correct, our tax compliance and IRS notice assistance teams can challenge the adjustment or arrange a manageable payment plan.