Claiming the Premium Tax Credit

For the first time, taxpayers are reporting their health care coverage status to the government. Many taxpayers that have purchased health care from the Marketplace can claim the premium tax credit. Taxpayers are able to take advantage of this credit by receiving it in advance. The credit is provided to help those with low and moderate income to afford health care.

The Marketplace calculates the amount of premium tax credit taxpayers are eligible for once information about their family’s details and projected household income have been provided. Taxpayers can have the credit paid to them in advance so that they can lower what they pay in their monthly premiums. They can choose to receive the entire credit amount, a partial amount or none of it in advance. Taxpayers can claim the total credit when they file their tax return for the year.

Taxpayers that are claiming the premium tax credit or have received advanced payments of premium tax credit need to complete a new form to report their health care coverage when filing their return.

The IRS advises taxpayers to use tax preparation software to make necessary calculations easier. Those that cannot afford to hire a tax professional can contact the IRS to get their questions answered.

Labels: , , , , , ,