FAQ’s about the Premium Tax Credit
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The premium tax credit is a refundable credit that helps eligible individuals and families with low or moderate income afford health insurance purchased through a Health Insurance Marketplace. To get this credit, you must meet certain eligibility requirements and file a tax return.
Here are five questions the IRS is hearing from taxpayers, along with answers and where to go for more information.
- What is included in household income?
For purposes of the PTC, household income is the modified adjusted gross income of you and your spouse if filing a joint return, plus the modified AGI of each individual in your tax family whom you claim as a dependent and who is required to file a tax return because their income meets the income tax return filing threshold. Household income does not include the modified AGI of those individuals you claim as dependents and who are filing a return only to claim a refund of withheld income tax or estimated tax. For this and other detailed premium tax credit questions and answers visit IRS.gov/aca.
- The IRS is asking to see my 1095-A. What should I do?
You should follow the instructions on the correspondence that you received from the IRS. You may be asked for a copy of Form 1095-A in order to verify information that has been entered on your tax return. Visit our Health Insurance Marketplace Statements webpage for more information about Form 1095-A and how to obtain a copy,
- If I got advance payments of the PTC, do I have to file even if I never had a filing requirement before?
Yes. If you received the benefit of advance payments of the premium tax credit, 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 a return and submit a Form 8962 for this purpose even if you are otherwise not required to file a return.
- Marketplace says I did not file, but I did file before the extended due date. What should I do?
In advance of the open enrollment period that runs through January 31, 2016, the Marketplace sent Marketplace Open Enrollment and Annual Redetermination letters to individuals who might not have filed a tax return. Follow the instructions in the letter you received.
- Log in to your Marketplace account to update your 2016 Marketplace application.
- Check the box telling the Marketplace you reconciled your premium tax credits by filing a 2014 tax return and Form 8962.
- Update your Marketplace application by December 15, 2015.
- If you don’t update your Marketplace application, any help with costs you currently get will stop on December 31, 2015 and you’ll be responsible for the full upfront costs of your Marketplace plan and covered services.
- For more help visit HealthCare.gov or call your Marketplace.
- What are my options to receive help with filing a return and reconciling?
Filing electronically is the easiest way to file a complete and accurate tax return as the software guides you through the filing process. Electronic filing options include free Volunteer Assistance, IRS Free File, commercial software, and professional assistance. For information about filing a return and reconciling advance credit payments, visit IRS.gov/aca.
FAQ’s Premium Tax Credit
What is the Advance Premium Tax Credit?
Click here to calculate APTC, view benefits and net premium.
When and how do I take it? Online Application Screen Shots
How does it reconcile on my 2015 taxes?
Is there a maximum amount I have to pay back, if I took too much tax credit?
Do I have to pay the entire premium or what?
What if I don’t owe taxes, do I still get the credit?
What about Child Support?
Will my taxes be higher if we filing jointly, as mandated?
If I’m under 26, pay my own taxes and could go on my parents plan, can I still qualify for subsidies?
Brochures – Answers
Kaiser Foundation – Subsidies and Enhanced Silver FAQ’s
Center on Budget and Policy Priorities FAQ’s
Covered CA Application See Bookmarks for Income and Other Income
Explanation of how tax credit works and when to take it
2014 & 2015 Tax Forms
Video Individual Financial Assistance – Sample Scenarios
The premium tax credit is refundable so taxpayers who have little or no income tax liability can still benefit. irs.gov FAQ’s
Turbo Tax Calculator Tax Policy Center.org
Premium and Tax Credit Calculators
Code of Federal Regulations CFR 1.36 B – 3 How the Credit gets calculated or just use our quote engine and enter your expected Household Income for 2015 – Modified Adjusted Gross Income – Line 37 MAGI .