What’s better take the Subsidy – APTC now or at tax time? 


Certainly the BIG advantage, is lower, more affordable premiums during the year.  Plus, you might qualify for Enhanced Silver Benefits!  Which lowers Co-Pays, Deductibles and the OOP Out of Pocket Maximum.


If you took more creidt than what your tax return 1040 and 8962 show, you have to pay back the excess or a maximum amount.

You are mandated to report changes in expected MAGI income within 30 days.


Covered CA Brochure – Subsidy NOW or Tax Time?
Flow Chart - Can you take the PTC Premium Tax Credit
Flow Chart – Can you take the PTC Premium Tax Credit Publication #974
  Advance Premium Tax Credit


FAQs / Ask Us a Question

Take it later
Take it Later
Premium Assistance


Slider to determine credit
Slider to determine credit


Monthly Advance or Credit? 2nd Step – Click to enlarge



  IRS Premium Tax Credit

Check out the brochure from Covered CA on the take it now or later options.

Three Tax Considerations during Marketplace Open Enrollment

  1. Advance credit payments lower premiums – You can choose to have all, some, or none of your estimated credit paid in advance directly to your insurance company on your behalf to lower what you pay out-of-pocket for your monthly premiums.  These payments are called advance payments of the premium tax credit  (APTC) or advance credit payments.  If you do not get advance credit payments, you will be responsible for paying the full monthly premium.
    1. Possible SNAFU’s – Insurance Company asking for excess credits back… OC Register 7.27.2016
  2. A tax return may be required – If you received the benefit of advance credit payments, you must file a tax return to reconcile the amount of advance credit payments made on your behalf with the amount of your actual premium tax credit.  You must file an income tax return for this purpose even if you are otherwise not required to file a return.
  3. Credit can be claimed at tax time – If you choose not to get advance credit payments, or get less than the full amount in advance, you can claim the full benefit of the premium tax credit that you are allowed when you file your tax return. This will increase your refund or lower the amount of tax that you would otherwise owe.


Questions and Answers on IRS.gov/ca for information about the premium tax credit.

Related Pages in Tax Credit and FAQ Section

1095 A – Proof of Coverage from Covered CA  – shows amount of tax credit you rec’d during the year, that was paid to the Insurance Company to reduce premiums.

CHCF What is the premium tax credit?

IRS.Gov FAQ’s on the Premium Tax Credit

Publication 5120 –Your Credit, Your Choice – Get it Now or Get it Later   English | Spanish

Publication 5121 –Need help paying for health insurance premiums?   English

Publication 5152 –Report changes to the Marketplace as they happen  English | Spanish

What if you don’t tell Covered CA in advance that you want the credit, can you still get the deduction when you file taxes, as long as you got your coverage though Covered CA?



Here’s screen shots of Covered CA’s ONLINE Application of how you might want to take less or zero subsidy and just even out at tax time.  Covered CA brochure on take it now or later Page 4.  It may also help keep you out of Medi-Cal if your income is too low, see  Federal Poverty Level –FPL chart or get a quote.

• Changing APTC – Recorded Webinar
• Changing APTC –  PDF of Webinar Presentation


7 comments on “Premium Subsidy Now or Tax Time?

  1. A side observation- it seems to be a really weird system to navigate for someone who is self-employed and has unstable income.

    Actually, it’s weird for everyone, in the sense that no one really knows if their income will change suddenly for better or worse, and then they’ll have to resolve things retroactively with IRS.

    • That’s why they want you to report deviations of more than 10% of your estimated annual income within 30 days. See link for publication 5152 and job aid for reporting income above.

      • Haha thanks for your responses, I didn’t know about the monthly thing! Wow you are SO knowledgeable, it’s incredible. As a knowledgeable insurance agent, you’re basically a rocket scientist.

        Okay I’ll get the documents together and send them to you.

        Thank you so much,


  2. Hi Steve,

    I just got my my taxes done this past week and found out that i had to do a repayment and ended up losing $357.00 on my federal tax return. I was wondering if you could make an adjustment on income so i don’t have to take as large of a discount so this doesnt happen in the future, thank you


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