Qualifing for the Advance Premium Tax Credit
What is the Advance Premium Tax Credit?
Advance Premium Tax Credits are otherwise known as subsidies and they can help lower the cost of what you might pay monthly for your health care coverage. You are eligible for these tax credits if your household income falls below a certain amount depending on your family size. There is a great income and family size chart at healthcare.gov.
You must have bought your health insurance through the Marketplace and then the tax credit you receive can be applied to your monthly premium payments, this credit can be sent directly to your insurance company which will lower the amount you pay on premiums each month. It’s called an Advance Payment of the Premium Tax Credit.
Watch a video explanation of the Advanced Premium Tax Credit.
You can also choose to receive a lump sum as a tax credit when you file your taxes the following year. If you received a credit last year you’ll need to file Form 8962 this year and attach it to your federal tax return. Then you will use your return to reconcile the difference between credits you received and your eligibility. You may be required to pay back if you received too much of a credit or you may be owed a credit. You will figure your credit on Form 8962, those with higher incomes receive less of a credit than those with a lower credit. A full explanation of the Advance Premium Tax Credit is also available on the IRS website.
The Advance Premium Tax Credit can be confusing. If you need help with an insurance plan you bought through the marketplace, don’t understand benefits, or need to research supplemental plans and options, you can always contact an insurance advocate to assist.
Call Amazing Healthcare Consultants.
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