It is to help eligible individuals and families pay for health insurance.
The two payment options are:
- Get it Now-advance credit payments
- Get it Latter-without advance credit payments
To be eligible for a tax credit, individual must be:
- Be an applicable taxpayer with income between 100 and 400% FPL and cannot be claimed as a dependent, and if married files a joint tax return.
- Have a "Coverage Month" - Be enrolled in a QHP through a Marketplace, and not eligible for other minimum essential coverage and have the policy premiums paid.
PTC (Premium Tax Credits) Key Considerations
- Advance credit payments are optional
- Reconciling advance credit payments is required !!
- Differences between advance credit payments and the credit are likely
- Changes in circumstances can affect the PTC amount
- A Tax return must be filed!!
IRS Form 1095-A
Issued by the Health Insurance Marketplace.
It will be sent out by January 31, 2015.
This form will show:
- Documentation of Health Coverage by month
- Premiums
- Advance payments of Premium Tax Credits
IRS Form 8962
This form is filed with your Form 1040 to help taxpayer reconcile your Advance Payments and calculation of PTC (Premium Tax Credit) from form #1095-A
Included on this form:
- Part 1-Annual & Monthly Contribution
- Part 2-Premium Tax Credit Claim & Reconciliation
- Part 3-Repayment of Excess of Advance Payment
- Part 4-Shared Policy Allocations
- Part 5-Alternative Calculation for Marriage
Premium Tax Credit Summary
- Refundable credit for only eligible individuals
- Get it Now (advance credit payments) or Get it Latter (without advance credit payments)
- Must report changes in Life Changing Events to change your Circumstances and credits
- Advance credit payments must be reconciled
- Everyone who receives this credit must file a tax return and use form 1095A, Form 8962, Form 1040
Resources for PTC
- HealthCare.gov website
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