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Wednesday, August 13, 2014

Now is the Time for a Mid-Year Premium Tax Credit Checkup





If you applied for a health insurance tax credit through the Health Insurance Marketplace, it might be time to give your status a check-up.  Maybe you’ve experienced some life changes that will affect your credit….

Changes in circumstances that you should report to the Marketplace include, but are not limited to:
  • an increase or decrease in your income
  • marriage or divorce
  • the birth or adoption of a child
  • starting a job with health insurance
  • gaining or losing your eligibility for other health care coverage
  • changing your residence

Reporting the changes will help you avoid getting too much or too little advance payment of the premium tax credit. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing out on premium assistance to reduce your monthly premiums.  

Repayments of excess premium assistance may be limited to an amount between $400 and $2,500 depending on your income and filing status.  However, if advance payment of the premium tax credit was made but your income for the year turns out to be too high to receive the premium tax credit, you will have to repay all of the payments that were made on your behalf, with no limitation.  Therefore, it is important that you report changes in circumstances that may have occurred since you signed up for your plan.  

Changes in circumstances also may qualify you for a special enrollment period to change or get insurance through the Marketplace.  In most cases, if you qualify for the special enrollment period, you will have sixty days to enroll following the change in circumstances.  You can find information about special enrollment at HealthCare.gov.  

Find out more about the premium tax credit and other tax-related provisions of the health care law at IRS.gov/aca or stop by and visit your tax professional.