The Premium Tax Credit - The Basics

Special Enrollment Period Through August 15, 2021

Through August 15, 2021, there is a special enrollment period for health insurance through HealthCare.gov. If you don’t have health insurance, you may enroll in coverage from the Health Insurance Marketplace during this period. If you or your family members enroll in coverage from the Health Insurance Marketplace, you may be eligible for advance payments of the premium tax credit to help pay your premiums. Find out more at HealthCare.gov.

The premium tax credit – also known as PTC – is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace. To get this credit, you must meet certain requirements and file a tax return with Form 8962, Premium Tax Credit.

You are eligible for the premium tax credit if you meet all of the following requirements. You:

  • Have household income that falls within a certain range.
  • Do not file a tax return using the filing status of Married Filing Separately.
    • There is an exception to this rule that allows certain victims of domestic abuse and spousal abandonment to claim the credit using Married Filing Separately; for more information, see the Premium Tax Credit questions and answers.
  • Cannot be claimed as a dependent by another person.
  • Meet these additional requirements: In the same month, you or a family member:
    • Have health insurance coverage through a Health Insurance Marketplace.
    • Are not able to get affordable coverage through an eligible employer-sponsored plan that provides minimum value.
    • Are not eligible for coverage through a government program, like Medicaid, Medicare, CHIP or TRICARE.
    • Pay the share of premiums not covered by advance credit payments.

For more information about these eligibility requirements see Eligibility for the Premium Tax Credit.

When you enroll, 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 to your insurance company on your behalf to lower the out-of-pocket cost for your health insurance premiums.  

For more information about the Premium Tax Credit, see our Questions and Answers and other guidance PDF.

If you benefit from advance payments of the premium tax credit, it is important to report life changes to the Marketplace as they happen throughout the year.

Certain changes to your household, income or family size may affect the amount of your premium tax credit. These changes can alter your tax refund, or cause you to owe tax. Reporting these changes promptly will help you get the proper type and amount of financial assistance. For more information, see the Changes in Circumstances section of our Claiming the Credit and Reconciling Advance Credit Payments page.

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 and attach Form 8962, Premium Tax Credit, to your return.  You claim the premium tax credit and reconcile the credit with the amount of your advance credit payments for the year on Form 8962.

You must file a return even if you’re usually not required to do so. Filing your return without reconciling your advance payments will delay your refund and may affect future advance credit payments. For more information on filing a return to claim and reconcile the credit see Premium Tax Credit: Claiming the Credit and Reconciling Advance Credit Payments.

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.

The American Rescue Plan Act of 2021, enacted on March 11, 2021, suspended the requirement to repay excess advance payments of the premium tax credit (excess APTC) for tax year 2020. 

If you already filed a 2020 return and reported excess APTC or made an excess APTC repayment, you don’t need to file an amended return or take any other action.

If you have not filed your 2020 tax return, here’s what to do:

  • If you have excess APTC for 2020, you are not required to report it on your 2020 tax return or file Form 8962, Premium Tax Credit.
  • If you’re claiming a net Premium Tax Credit for 2020, you must file Form 8962, Premium Tax Credit 

    For details see: Tax Year 2020 Premium Tax Credit Frequently Asked Questions, Fact Sheet, News Release

For tax years other than 2020, 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 and attach Form 8962, Premium Tax Credit, to your return.  You claim the premium tax credit and reconcile the credit with the amount of your advance credit payments for the year on Form 8962.

For tax years other than 2020, you must file a return even if you’re usually not required to do so. Filing your return without reconciling your advance payments will delay your refund and may affect future advance credit payments. For more information on filing a return to claim and reconcile the credit see Premium Tax Credit: Claiming the Credit and Reconciling Advance Credit Payments.

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.

Form 1095-A, Health Insurance Marketplace Statement

Your Marketplace will provide Form 1095-A if you or one of your dependents had coverage through a Marketplace. For more information, visit our Health Insurance Marketplace Statement page.

If you also receive Form 1095-B or Form 1095-C, which are unrelated to the Marketplace, see our questions and answers for information about how these forms affect your tax return.

Form 8962, Premium Tax Credit

Use the information on Form 1095-A to claim the credit or reconcile advance credit payments on Form 8962, Premium Tax Credit.

Form 1040

File Form 8962 with your Form 1040Form 1040-SR or Form 1040-NR.

Publication 974, Premium Tax Credit

View Publication 974 for more details on the premium tax credit.