Affordable Care Act (ACA) – The Premium Tax Credit Presented by: Jacquelene Graziano

Tax-Aid.org

Refundable tax credit claimed on new Form 8962 filed with Form 1040  Refundable tax credit claimed on new Form 8962 filed with Form 1040  Two payment options: 

• Get it Now – advance credit payments • Get it Later – without advance credit payments 

Marketplace administers Advance Payment of PTC (APTC)

You may be eligible if you meet all of the following:  buy health insurance through Marketplace  are ineligible for coverage through employer or government plan  are within certain income limits  do not file a Married Filing Separately tax return (unless you meet the criteria in section 1.36B-2T(b)(2) of the Temporary Income Tax Regulations, which allows certain victims of domestic abuse and spousal abandonment to claim the premium tax credit  cannot be claimed as a dependent by another person

One Individual:$11,490 (100% FPL) - $45,960 (400% FPL)  Family of Two $15,510 (100% FPL) - $62,040 (400% FPL)  Family of Four: $23,550 (100% FPL) - $94,200 (400% FPL) Example: Based on the 2013 FPL, a family of four could have a household income up to and including $94,200 and still be eligible for the PTC. 

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Advance credit payments are optional. Reconciling advance credit payments is required and a tax return must be filed. Differences between advance credit payments and the credit are likely. Changes in circumstances can affect the PTC amount.

Changes in circumstances can affect:

Eligibility for the PTC - even if not previously eligible • Amount of the premium tax credit •

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Report changes to HealthCare.gov or state marketplace website promptly Reporting changes will help ensure receipt of the proper amount of advance payments of the premium tax credit

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Birth or Adoption Marriage or divorce Increases or decreases in number of dependents Moving to another address Increase or decrease in your income Gaining or losing health care coverage or eligibility Gaining or losing health care coverage or eligibility

Note: For additional examples of life events go to Healthcare.gov

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Form 1095-A (Health Insurance Marketplace Statement) will be issued by the Health Insurance Marketplace

• Sent by January 31 • Shows: • Documentation of coverage by month • Premiums, and • Advance payments of PTC

Advance payments $4,000 Calculation of PTC - $3,000 Difference $1,000 Repayment amount = $1,000 * *Amount from Form 8962 that would be entered on Form 1040 (may be subject to a repayment cap) Note: A tax return must be filed to reconcile advance credit payments regardless of any other filing requirement.

36B Advance Repayment Limitations Household Income (as % of Federal Poverty Line)

Single Filing Status

Any Other Filing Status

$300

$600

Less than 200% At least 200% - less than 300% At least 300% - less than 400%

$750

$1,500

$1,250

$2,500

400% or more

N/A

N/A

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Ervin is single and had household income of $28,725 FPL for single: $11,490 – 100% $28,725/$11,490 = 250% (.0805) $28,725 x .0805 = $2,312 (Ervin’s Share) Ervin enrolled in health plan with premium of $5,000 Benchmark premium plan – $5,200 $5,200 - $2,312 = $2,888 PTC

Form 1040

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Refundable credit for only eligible individuals Get it Now (advance credit payments) or Get it Later (without advance credit) Report changes in circumstances Advance credit payments must be reconciled Everyone who receives this credit must file a tax return Use form 1095A, Form 8962 and Form 1040

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For all taxpayers:

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Type of health insurance for themselves, their spouse, and their dependents

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For taxpayers who do not have insurance for themselves, their spouse, and/or their dependents:

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Income information for themselves, their spouse, and their dependents Exemption Certificate Number of any Marketplacegranted coverage exemptions for themselves, their spouse, and their dependents

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For taxpayers who acquired health insurance through the Marketplace for themselves, their spouse, and/or their dependents Form 1095-A, Health Insurance Marketplace Statement Income information for themselves, their spouse, and their dependents

Note: If a dependent on your return is covered on another taxpayer’s policy, or if someone on your policy is claimed as a dependent on another taxpayer’s return, you may need information from the other taxpayer’s return and/or Form 1095A.

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Publication 5157 Publication 4012, ACA Tab

Form 8965 and Instructions  Form 8962 and Instructions  Publication 974 

IRS.gov/ACA

HealthCare.gov