What is a Premium Tax Credit and How Does it Work?
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The government offers a Premium Tax Credit (PTC) to help eligible individuals and families with the cost of their monthly health insurance premiums. If you qualify, you may get a PTC to lower the amount you pay each month for your health insurance.
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Introduction
The premium tax credit is a refundable tax credit that helps eligible individuals and families cover the cost of health insurance premiums. If you qualify for the premium tax credit, you can choose to have some or all of it paid in advance to your insurance company to lower your monthly health insurance bill. You can also choose to wait to get the premium tax credit when you file your federal income tax return.
The premium tax credit is a subsidy that helps make health insurance affordable for people with modest incomes. The credit is based on your household income and the amount of your premium, and it is available to help pay for health insurance purchased through the Health Insurance Marketplace.
If you qualify for the premium tax credit, you can choose to have some or all of the credit paid in advance to your insurance company to lower your monthly health insurance bill. Or, you can wait to get all of the credit when you file your federal income taxes for the year.
To learn more about the premium tax credit and how it works, visit Healthcare.gov.
The premium tax credit is a refundable credit that helps eligible individuals and families cover the premium payments for their health insurance. The amount of the credit is based on the household income and the number of people in the household.
To qualify for the premium tax credit, you must:
-Have a qualifying health insurance plan
-Have an annual household income that is below a certain amount
-Not be eligible for other types of health coverage, such as Medicare or Medicaid
If you qualify for the premium tax credit, you will need to file a federal tax return to claim it. You will also need to provide information about your health insurance coverage on your return.
The premium tax credit is available to eligible taxpayers who enroll in a qualified health plan through the Health Insurance Marketplace. To be eligible for the credit, you must:
-Have household income within certain limits (for example, between 100 and 400 percent of the federal poverty level)
-Not be enrolled in government health coverage such as Medicare or Medicaid
-Not have access to affordable coverage through an employer
If you’re married, you must file a joint tax return to claim the credit.
The amount of the premium tax credit is based on your household income and the number of people in your family. The credit can be used to lower your monthly health insurance premiums, or it can be deposited into your account with a Marketplace insurer to be used towards future premium payments.
You may also be eligible for cost-sharing reductions, which lower your out-of-pocket costs for covered services.
If you purchased health insurance through the Health Insurance Marketplace, you may be eligible for a premium tax credit that lowers your monthly insurance bill. You can claim the premium tax credit when you file your taxes for the year.
Here’s how it works:
You’ll estimate your income and family size for the year when you apply for health insurance through the Marketplace. If your estimate is correct, you’ll get the premium tax credit in advance to lower your monthly payments.
When you file your taxes, you’ll reconcile the amount of advance credit payments you received with the premium tax credit you actually qualify for based on your actual income.
If you received too much in advance payments, you’ll owe money to the IRS. If you received too little, you’ll get a refundable credit when you file your taxes.
You may contact the Marketplace Call Center at 1-800-318-2596 for help with questions about your premium tax credit.
Conclusion
The premium tax credit is a key feature of the health care law that helps make health insurance more affordable for people with modest incomes. If you qualify for the premium tax credit, you can use it right away to lower your monthly health insurance bill. You can also choose to have some or all of the credit paid in advance directly to your insurer to lower what you pay out of your own pocket when you get your health care services.
