The Premium Tax Credit
The premium tax credit, or PTC, 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 requirements and file a tax return.
You are eligible for the premium tax credit if you meet all of the following requirements:
During enrollment through the Marketplace, the Marketplace will determine if you are eligible for advance payments of the premium tax credit, also called advance credit payments. Advance credit payments are amounts paid directly to your insurance company on your behalf to lower the out of pocket cost for your health insurance premiums.
The amount of the advance credit payments is based on an estimate of the amount of the premium tax credit that you will be allowed on your tax return and is determined by using your projected household income and family composition for the year and certain other information.
|Premium Tax Credit Tool
Use our interactive premium tax credit tool to see if you qualify.
|Change in Circumstances|
If you purchase health insurance coverage through the Marketplace and get assistance in paying premiums through advance credit payments made on your behalf, it is important to report life changes to the Marketplace throughout the year. Certain changes to your household, income or family size may affect your premium tax credit, tax refund or cause you to owe tax. Reporting these changes promptly will help you get the proper type and amount of financial assistance. Changes that can affect the amount of your actual premium tax credit include:
For the full list of changes you should report, visit HealthCare.gov.
|Claiming and Reconciling the Credit|
When you enroll in coverage through the Marketplace, you can choose to have monthly advance credit payments sent directly to your insurer. If you get the benefit of advance credit payments in any amount or if you plan to claim the premium tax credit, you must file a federal income tax return, even if you’re usually not required to file. Attach Form 8962, Premium Tax Credit, to your return to claim or reconcile the credit. Failing to file your tax return will prevent you from receiving advance credit payments in future years.
Filing electronically is the easiest way to file a complete and accurate tax return. Electronic filing options include free volunteer assistance, IRS Free File, commercial software and professional assistance.