Premium Tax Credit Claim

Feb 19, 2015 by

Obamacare

Now 9 million.

Heads up on the Affordable Care Act’s Premium Tax Credit (PTC) and your tax return. If you bought 2014 insurance through the Health Insurance Marketplace, you may have to file a tax return, even if otherwise you wouldn’t be required to file.

Advance PTC Payments

Did you buy 2014 insurance through the Health Insurance Marketplace and learned you were eligible for the PTC (based on your guess of your 2014 income and other factors)? If so, then you may have asked Uncle Sam to send advance payments of your tax credit to your insurer to cut your monthly insurance premiums a bit. At that time, the Marketplace estimated your credit based on information you provided about your expected household income and family size for the year.

Now 2014’s over and you’ve got to settle up. Your Marketplace’s estimate of your total 2014 credit may have been more or less than the actual credit you’re due.

Form 1095-A

If not already, you should soon receive Form 1095-A, Health Insurance Marketplace Statement, from your Marketplace. Once you get your 1095-A, then you’re ready to complete new Form 8962, titled Premium Tax Credit. Among other things, the 1095-A will report the advance credit payments Uncle Sam sent to your insurer on your behalf. Reconciling this number with the actual PTC you’re due is what Form 8962 is partly about.

If You’re Low Income, You Might Get a Break

Let’s say your advance credit payments in 2014 add up to more than the total PTC you’re due for the year. If your 2014 household income was equal to or more than 400% of the federal poverty line, then you must repay all of the excess advance credit payment.

BUT if your 2014 household income was less than 400% of the federal poverty line, you won’t have to repay all of the excess advance payment. Working through Form 8962 will sort this out.

Here’s 2014 federal poverty line information:

Federal Poverty Line

If you live in Alaska or Hawaii, check the instructions for Form 8962 for poverty line information.

 

 

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