The Affordable Care Act (ACA) offers a refundable tax credit to individuals without employer-sponsored coverage or who qualify for public programs; it applies to households earning between 100-400% of federal poverty level for their family size annually.
Advance premium tax credits are calculated based on projected income and household information, so when filing taxes you must compare this estimate with what really was earned during that year.
What is APTC?
Advance premium tax credits through the Affordable Care Act provide federal tax credits that reduce monthly health insurance premiums when purchased through the Marketplace. Their amount depends on your income and family size as reported on your tax return.
Advanceable tax credits allow you to receive an estimated credit amount before filing your taxes; then the IRS adjusts this estimate based on actual income received over time.
If you receive more APTC than your earnings total, any excess will need to be returned when filing your tax return.
Therefore, any time there is a change in your life such as getting married or giving birth, this could impact your APTC calculations. Should this occur, report these updates online in order to get them updated immediately.
How do I apply for APTC?
Advance premium tax credit (APTC) is one of the ways that the Affordable Care Act attempts to make health insurance more affordable. As it’s refundable, you get back any premium money when filing your federal income taxes at year’s end.
When applying for APTC through the Affordable Care Act Marketplace, the government estimates your eligibility based on estimated income and household size before sending that amount directly to an insurer in order to reduce monthly premiums.
Option 2 is to claim your APTC when filing your taxes using Form 8962. This option may be beneficial if you took more APTC than necessary and need to repay some or all of it when filing taxes in 2022.
If someone paid on your behalf to obtain APTC in 2022, enter all premiums paid in your name on Line 27 – such as enrollment fees and Second Lowest Cost Silver Plan premiums – in addition to your APTC payments.
How much APTC do I qualify for?
If you qualify for the Affordable Care Act’s Advanced Premium Tax Credit (APTC), then advance payments can be used to reduce monthly premiums. How much APTC you get depends on both your income and family size.
First, eligibility depends on your family size and how many dependents are claimed when filing your taxes. Any changes in income and family composition should also be reported promptly.
Next, complete Form 8962 to report information regarding your Advanced Premium Tax Credit and reconcile it with any PTC you received during the year. This form must be filed when purchasing or changing health coverage.
On your tax return, it is imperative that you include any APTC you received for coverage that you purchased. Failing to do so could necessitate repaying excess APTC that was granted; as it’s calculated based on projected income levels; should your income change during the year significantly, this could significantly change what can be claimed on tax return.
How do I use my APTC?
When purchasing health insurance through an insurance marketplace, an advance premium tax credit (APTC) could help lower your monthly premiums. This federal subsidy is available to people earning less than 400% of the federal poverty level who cannot afford coverage on their own.
Your Adjusted Personal Tax Credit amount depends on your income and family size as well as any health insurance costs in your state.
Your American Premium Tax Credit can be utilized in several ways, from using it to reduce insurance premiums in advance or claiming its full amount with your federal income tax return. Any life changes such as marriage or child birth could alter this amount and you should notify authorities as soon as possible of any adjustments that might need to be made to it.
Once you receive your premium tax credit, Form 8962 should be completed and attached to your federal income tax return as soon as possible. This allows you to ensure you have received the correct amount and to see whether any payments must be made back for advance payments made prior to filing taxes.
