| Household Income Single All other filers | Over 700% FPL Full amount received Full amount received |
|---|
If at the end of the year you’ve taken more premium tax credit in advance than you’re due based on your final income,
you’ll have to pay back the excess when you file your federal tax return
. If you’ve taken less than you qualify for, you’ll get the difference back.
How is the amount of the premium tax credit computed? The amount of the premium tax credit is generally
equal to the premium for the second lowest cost silver plan available through the Marketplace
that applies to the members of your coverage family, minus a certain percentage of your household income.
The American
Rescue Plan Act
of 2021, enacted on March 11, 2021, suspended the requirement to repay excess advance payments of the premium tax credit (excess APTC) for tax year 2020.
Premium credits are based on a household’s income in the tax year premiums are paid. … In tax year 2019, the maximum payment ranged from $600 for married couples with incomes below 200 percent of FPL to
$2,650 for couples
with incomes of at least 300 but less than 400 percent of FPL (table 2).
One way to avoid having to pay back all or part of your Affordable Care Act premium assistance is
to report to your health exchange any changes in your income during the year
. The exchange can adjust downward the amount of premium assistance you receive for the remainder of the year.
Under the American Rescue Plan Act of 2021, the requirement that taxpayers pay back a portion or all of their excess advance payment of the Premium Tax Credit (excess APTC) for tax year
2020 has been suspended
.
For tax years 2021 and 2022, you can still qualify with income of 400% and higher. Here’s the 100% level for 2021:
Family of one — $12,760
.
Family of two — $17,240
.
If you didn’t receive all of the premium tax credit you’re entitled to during the year,
you can claim the difference when you file your tax return
. If you’re uncertain about your income for the coming year, remember that you can modify the amount of premium tax credit during the year if your income changes.
Will I get penalized if I underestimate my income for Obamacare?
It’s normal for most people to overestimate or underestimate their ACA premium tax credit by a small amount.
There’s no added penalty for taking extra subsidies
. The difference will be reflected in your tax payment or refund.
What happens if you don’t file Form 8962?
What if I file but don’t include Form 8962? For any year when you received advanced premium tax credits, you are required to file a federal income tax return, including Form 8962. If you fail to do this — it is called “
failure to reconcile
” — you may be unable to apply for premium tax credits for the following year.
What is a repayment limitation?
Repayment Limitation. The amount is
limited to certain amounts helping to ensure you won’t owe more than you can afford
if you received an excess of Advanced Premium Tax Credits.
What is the income limit for Marketplace insurance 2020?
In general, you may be eligible for tax credits to lower your premium if you are single and your annual 2020 income is
between $12,490 to $49,960
or if your household income is between $21,330 to $85,320 for a family of three (the lower income limits are higher in states that expanded Medicaid).
What happens if my income increases while on Obamacare?
You may become eligible or ineligible for subsidies depending on how your income changes. If you experience a significant increase in your yearly income and become ineligible for subsidies, you
may have to pay your subsidies back during tax season
the following year.
How advance credit payments affect your refund. If the premium tax credit computed on your return is more than the advance credit payments made on your behalf during the year,
the difference will increase your refund or lower the amount of tax you owe
. This will be reported on Form 1040, Schedule 3.
Is Form 8962 required for 2020 taxes?
The
IRS will process tax returns without Form 8962
for tax year 2020 by reducing the excess advance premium tax credit repayment amount to zero. … There is no need to file an amended tax return or contact the IRS.
