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.Advance Premium Tax Credit
You are mandated to report changes in expected MAGI income within 30 days.
Three Tax Considerations during Covered CA Open Enrollment
- 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.
- Possible SNAFU’s – Insurance Company asking for excess credits back… OC Register 7.27.2016
- 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.
- 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.
Premium and Tax Credit Calculators
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?
Publication 5121 –Need help paying for health insurance premiums? English
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.