Common Questions about the Premium Tax Credit

If you receive an Advance Premium Tax Credit on your individual or family health insurance plan in Georgia, you MUST file your taxes a specific way or you could lose that tax credit. This could result in you losing a lot of money! We want to make sure that this happens to NONE of our clients. To read the detailed answered then head over to https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-premium-tax-credit. We will attempt to break down the information in this link and make it easily understandable. Please note that we cannot give tax advice and we encourage you to read the IRS.GOV website.

What is a Premium Tax Credit?

A premium tax credit is the subsidy that the government gives to low and moderate income individuals and families to help them afford health insurance. When this credit is used to reduce your premiums throughout the year it is called an advance payments of premium tax credit (or APTC).

What happens if my income or family size changes during the year?

It is important to remember that your subsidy amount is just an estimate. When you file your taxes for the year you received the subsidy is when you will know the exact amount you receive. This can result in you being owed money back or having to pay more.

This is why it is very important to update the marketplace if you have a change in income, family size or other life change (like a divorce). Notifying the marketplace will allow them to adjust your APTC so that you are not surprised with a large bill at the end of the year. It could also cause your premiums to decrease if you are making less money than you through or have additional children during the year.

How do I make sure to do my tax’s correct, so I do not lose my advance premium tax credit?

This is very important! You will receive a 1095-A form by mid-February from Healthcare.gov. If you have not received yours for this year, then please call us!

You must then use the 1095-A form to complete a Form 8962 when filing your taxes. If you do not complete a Form 8962 then you run the risk of losing your advance premium tax credit. This means you would have to pay all the money you saved back!

It is important that you use these two forms to file your taxes correctly and on time. These two forms determine the amount of your premium tax credit and records the credits you used to lower your health plan premiums. Both forms are required when filing your taxes.

How will I know if my premium tax credit changes after I file my taxes?

Between March and May, a 90 day notice will be mailed to members if their cost sharing reductions or tax credits are changing due to their tax filings. In May, members who have not filed will receive a notice that they will lose their tax credits and cost sharing reductions if they do not file.
Starting in September, healthcare.gov will send members who failed to correctly file Form 8962 a notice that they will lose their credits if they don’t amend their tax filing.

Can someone help me with my taxes?

Yes! If you make $57,000 or less, you may qualify for free help via the IRS’s Volunteer Income Tax Assistance (VITA) program. Go here for more information: https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers

You can find more forms, tools and instructions about Form 8962, Form 1095-A and deadlines here: www.healthcare.gov/tax-forms-and-tools/

What is the most important thing to take away from this article?

 

Remember to file your taxes and file Form 8962!

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