Premium Tax Credit (PTC) Overview

When you enroll in Marketplace coverage, you’ll learn if you qualify for advance payments of the premium tax credit (APTC), also called advance credit payments. The amount of the advance payments of the premium tax credit for which you qualify is based on the income estimate and household information you put on your Marketplace application.

If you receive the benefit of advance payments of the premium tax credit to help pay your insurance premiums, you will be required to file Form 8962, Premium Tax Credit (PTC), with your tax return for the year of coverage. On your Form 8962 you will reconcile the amount of your advance credit payments with the PTC you may claim based on the income and family size you report on your tax return. Differences between your PTC and the advance credit payments made on your behalf will affect your tax liability for the year of coverage, as explained in “How do I claim PTC” below. Therefore, it's important that you promptly notify the Marketplace of any changes in the information the Marketplace used to compute the amount of your advance credit payments.

You should promptly report any changes in:

• your household income,
• your family size,
• your address, or
• changes in your tax family’s eligibility to enroll in health insurance through an employer or a government program such as Medicare.

For more information on enrollment guidelines and how to report changes, visit Healthcare.gov.

If you’re eligible, you can choose to have all, some or none of the advance credit payments for which you qualify sent to your insurance company.

• All: The marketplace will send your monthly advance credit payments directly to your insurance company, so you’ll pay less each month.
• Some: The marketplace will send a portion of the advance credit payments for which you qualify directly to your insurance company, and if your premium tax credit is more than your advance credit payments you will claim this amount as a tax credit when you file your tax return.
• None: You can choose to have nothing sent to your insurance company during the year and wait to claim all of the benefit of your tax credit when you file your tax return.

• Caution: If your projected household income is close to the 400 percent upper limit, be sure to carefully consider the amount of advance credit payments you choose to have paid on your behalf.

You may be eligible to claim PTC if you meet all of the following requirements:

• Your household income is at least 100 percent* but not more than 400 percent of the federal poverty line (FPL) for your family size. If your household income is more than 400 percent of the FPL for your family size, you are not allowed a premium tax credit and will have repay all of the advance credit payments made on behalf of you and your tax family members.

Note: For tax years 2021 through 2025, Congress temporarily eliminated the requirement that a taxpayer’s household income may not be more than 400 percent of the FPL. Refer to Topic B:Q3 in the Questions and answers on the Premium Tax Credit.

• You did not use a Married Filing Separate filing status unless you met an exception.**
• You cannot be claimed as a dependent by another person.
• You or a member of your tax family enroll in coverage (excluding ‘catastrophic” coverage) through a Marketplace.
• You or any other tax family member enrolled in coverage is not eligible for an affordable employer-sponsored plan that provides minimum value or coverage through a government program like Medicaid, Medicare, CHIP or TRICARE. See the section below regarding Minimal Essential Coverage (MEC) for more details.***
• All enrollment premiums are paid by the due date of your tax return (not including extensions), or special circumstances applied that allowed you to stay covered.

If you need assistance in determining your eligibility, you can use the interactive tax assistant (ITA).

*Under special circumstances, you may be able to claim the PTC even though your income is below 100 percent of the federal poverty line. See the instructions for Form 8962 for more information.

**Certain victims of domestic abuse and spousal abandonment can claim the premium tax credit using the married filing separate filing status. See the instructions for Form 8962 for more information.

*** There are special rules about what it means to be eligible for employer or government coverage. See Publication 974 for more information.

To claim the premium tax credit (PTC) you must file a federal income tax return and attach Form 8962, Premium Tax Credit (PTC)​, even if you are not usually required to file. Also, if advance credit payments were made for you or someone in your tax family, you must file Form 8962 and reconcile (or compare) the advance credit payments made on your behalf with the PTC you are allowed for the year of coverage. Filing your return without reconciling your advance credit payments will delay your refund and may affect your eligibility for future advance credit payments. Use the information from Form 1095-A, Health Insurance Marketplace Statement, to complete the Form 8962 and reconcile your advance payments of the premium tax credit with the premium tax credit you are allowed on your tax return.

• If the premium tax credit you compute on your return is more than the advance credit payments made on your behalf during the year, the difference will increase your refund or lower the amount of tax you owe. This will be reported on Form 1040, Schedule 3.
• If the advance credit payments are more than the amount of the premium tax credit you are allowed, called excess APTC, you will add all – or a portion of – the excess APTC to your tax liability on Form 1040, Schedule 2. This will result in either a smaller refund or a larger balance due.
• 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.

Minimum Essential Coverage (MEC) is the type of health insurance coverage that satisfies the individual mandate under the Affordable Care Act (ACA). While the federal penalty for not having MEC is no longer in effect, having MEC may be a factor for certain employer-sponsored benefits and special enrollment periods for other types of coverage.

Note: While the federal penalty for not having MEC is no longer in effect, some states, like California, have their own individual mandates and require MEC.

Why MEC matters:

• An individual in your tax family who is eligible for MEC for a month is not in your coverage family for that month. Therefore, you cannot take the PTC for that individual’s coverage for the month(s) that individual is eligible for MEC.
• You are generally considered eligible for MEC if the coverage is available to you, even if you did not enroll. However, special rules may apply. Refer to the Minimum Essential Coverage (MEC) section of the Instructions for Form 8962 (2024) for more details.

Examples of MEC:

• Employer-sponsored plans: Coverage offered by an employer (including COBRA and retiree coverage).
• Individual market plans: Coverage purchased directly by individuals, including from the Marketplace.
• Medicare: Medicare Part A and Medicare Advantage plans.
• Medicaid and CHIP: Most Medicaid and CHIP coverage.
• TRICARE and Veterans Affairs: Certain veterans' health coverage and TRICARE.

Note: Some plans, often called "skinny" plans, may be marketed as MEC, but they might offer limited coverage and not be ACA-compliant.

You must file Form 8962 with your income tax return (Form 1040, 1040-SR, or 1040-NR) if any of the following apply to you.

• You are claiming the PTC.
• Advance payment of the premium tax credit (APTC) was paid for you or another individual in your tax family.
• You listed an individual as part of your tax family with the Marketplace and APTC was paid for this individual; however, you did not include this individual on your tax return, and no other taxpayer included the individual on their tax return.
  • See “Part II—Premium Tax Credit Claim and Reconciliation of Advance Payment of Premium Tax Credit” Lines 12 Through 23 in the instructions for Form 8962 (2024) for more information.
• If someone else enrolled an individual listed in your tax family and APTC was paid for that individual’s coverage.
  • You will need to obtain a copy of the Form 1095-A from the person who enrolled the individual.

Caution: If you are filing Form 8962, you cannot file Form 1040-SS

Electronically filed tax returns will be rejected if IRS records show that the taxpayer is required to reconcile APTC on Form 8962 but does not include the form with the tax return, (IRS business rule F8962 070). A taxpayer whose electronically filed return is rejected because Form 8962 is not included should:

• review their health insurance records, including Form 1095-A, and if applicable, determine whether a dependent was separately enrolled in the exchange and has a Form 1095-A,
• refile their returns by completing and including Form 8962 or
• provide a written explanation of the reasons for its absence.

Immediately resolving the missing Form 8962 issue at the time of filing avoids any processing delays, saves time and prevents a simple mistake from holding up any refund the taxpayer may be owed.

If you don’t have your Form 1095-A, you can create or sign in to your IRS Individual Online Account to view and download Form 1095-A. For most taxpayers, Forms 1095-A is available under the “Records and Status” tab. Only documents issued in your name will appear; if you file jointly, your spouse must use their own Online Account to retrieve documents issued to them. Similarly, if your dependent separately enrolled in the exchange and received a Form 1095-A, they must also use their own Online Account to retrieve documents issued to them.

Taxpayers who are required to reconcile APTC and who file on paper but do not include Form 8962, will generally receive letters from the IRS, because IRS business rule F8962-070 only applies to electronically filed returns.

• These paper-filed returns will be accepted, and the IRS will generally follow up by mail.
• The IRS may also send a letter to taxpayers when more information is needed concerning the explanation the taxpayer provided for the missing Form 8962.

See How to correct an electronically filed return rejected for a missing Form 8962 for more information.

If you or anyone in your household enrolled in a health plan through the Health Insurance Marketplace, you’ll get a Form 1095-A, Health Insurance Marketplace Statement. You will get this form from the Marketplace, not the IRS. In addition, many taxpayers can view and download Form 1095-A in their IRS Individual Online Account.

The Marketplace will send you a Health Insurance Marketplace statement, Form 1095-A, by January 31 of the year following the year of coverage. This form shows the amount of the premiums for you and your family's health care plans. This form also includes other information – such as advance credit payments made on your behalf – that you will need to complete your Form 8962. For more information about Form 1095-A see Health Insurance Marketplace Statements. If you did not receive your Form 1095-A, check your IRS Individual Online Account or contact the Marketplace.

You are not required to send the IRS information forms or other proof of health care coverage when filing your tax return. However, it’s a good idea to keep these records on hand. This documentation includes:

• Form 1095 information forms
• Insurance cards
• Explanation of benefits
• Statements from your insurer
• W-2 or payroll statements reflecting health insurance deductions
• Records of advance payments of the premium tax credit
• Other statements indicating that you, or a member of your family, had health care coverage

If you are expecting to receive a Form 1095-A, Health Insurance Marketplace Statement, you should wait to file your income tax return until you receive that form. If you don’t receive a Form 1095-A from the Marketplace, retrieve it in your IRS Individual Online Account or contact the Marketplace. You might not receive a Form 1095-B or Form 1095-C from your coverage providers or employer by the time you are ready to file your tax return. You can prepare and file your returns without Form 1095-B or Form 1095-C. You should not attach any of these forms to your tax return.

The IRS has posted a set of questions and answers about the Forms 1095-A, 1095-B and 1095-C. The questions and answers explain who should expect to receive the forms, how they can be used, and how to file with or without the forms.