The premium tax credit (PTC) is a refundable tax credit that provides financial assistance to families with low or moderate income to afford health insurance purchased through a Health Insurance Marketplace. To be eligible for the PTC, your household income must be between 100 and 400 percent of the federal poverty line for your family size. If an individual purchased a health care plan outside of the Marketplace, such as certain employer-sponsored plans or government health care coverage, like Medicare, Medicaid, or TRICARE, you would not be eligible for PTC. To see if you are eligible for the PTC, use the following Subsidy Calculator.
There are two ways an individual can use the PTC. You can choose to use advanced premium tax credit (APTC) payments, which are amounts paid directly to the insurance company on your behalf to lower the out of pocket expense of your health insurance premium each month. Or you can chose not to receive APTCs and receive the full PTC credit when you file your tax return for the year.
If you have enrolled in a health care plan through the Marketplace in 2016, you will receive Form 1095-A (Health Insurance Marketplace Statement). This form contains information about your household’s health care plan, including any PTC you may have received. It is also used to reconcile the credit on your tax return with APTC. The 1095-A is generally mailed to consumers by February 1st. It is also available online, in an individual’s personal Marketplace account.
- If you elect to use APTC, consider the amount you choose to use carefully. If your household income on your tax return is 400 percent or more of the federal poverty line for your family size, you will have to repay all of the advance credit payments made on behalf of you and your family members. This information is reconciled when you file your tax return using Form 8962. For more help on this tax form, check out our 5-Part Breakdown of Form 8962.
If you have experienced a change to your original qualifying income and/or status, such as household size, resident state, etc., it is important to report these changes as soon as possible to the Marketplace, as you may have to repay a portion or all of the APTC you receive.
If you were expecting to receive Form 1095-A, and have not received it, please contact the Marketplace call center at
1-800-318-2596 or your state-based Marketplace. Click here for a list of Marketplace contacts provided by the IRS.
To consult with a professional Liberty Tax® ACA Advisor at your local Liberty Tax® office, contact 800-673-8600 or visit HealthCareTaxInfo.com.