Advance premium tax credit (APTC) - Glossary (2024)

FAQs

How to calculate the advance payment of premium tax credit? ›

Calculation of the Federal Advance Premium Tax Credit

The APTC equals the difference between (1) the cost of the “second-lowest cost silver plan” available to you (based on your age, family size, and county of residence) and (2) the maximum amount you are expected to pay towards your health insurance premiums.

The Advanced Premium Tax Credit is provided to those who qualify to help pay for health coverage. Your APTC is calculated based on your estimated annual household income, household size and where you live. If your income or family size changes, this may impact the APTC you receive.

The advanced premium tax credit is a federal tax credit for individuals that reduces the amount they pay for monthly health insurance premiums when they buy health insurance on the Marketplace.

Income Limits

In general, individuals and families may be eligible for APTC for their Marketplace coverage if their household income for the year is at least 100 percent but no more than 400 percent of the FPL for their household size.

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.

If you used more premium tax credit than you qualify for, you'll pay the difference with your federal taxes. If you used less, you'll get the difference as a credit.

To be eligible for the premium tax credit, your household income must be at least 100 percent and, for years other than 2021 and 2022, no more than 400 percent of the federal poverty line for your family size, although there are two exceptions for individuals with household income below 100 percent of the applicable ...

Who is eligible for health insurance subsidies? In 2024, you'll typically be eligible for ACA subsidies if you earn between $14,580 and $58,320 as an individual. For a family of four, you're eligible with a household income between $30,000 and $120,000.

You can adjust your APTC (advanced premium tax credit) amount during plan enrollment or any time after enrollment is complete. You can adjust it as often as you like during the month, but any change made after coverage has started is effective the first day of the next month.

Eligibility for APTC is based on the consumer's projections of household income, tax family size, and other eligibility criteria, including who in the tax family (the applicant, the applicant's spouse if filing jointly, and dependents) may be eligible for other minimum essential coverage for the benefit year.

Should I use all of my tax credit for health insurance? ›

You can use all, some, or none of your premium tax credit in advance to lower your monthly premium. If you use more advance payments of the tax credit than you qualify for based on your final yearly income, you must repay the difference when you file your federal income tax return.

(updated Feb. 24, 2022) A1. The Premium Tax Credit is a refundable tax credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace, also known as the Exchange.

These payments – which are called advance payments of the premium tax credit or advance credit payments – lower what you pay out-of-pocket for your monthly premiums. If you do not get advance credit payments, you will be responsible for paying the full monthly premium.

How do I get a 10,000 tax refund? You could end up with a $10,000 tax refund if you've paid significantly more tax payments than you owe at the end of the year.

They will inquire about your tax return from the IRS and other databases. If you underestimated your income for that year and received a subsidy, you will need to pay the entire subsidy back the next time you file your taxes. You must report income changes to Covered California within 30 days.

Estimate your total income from all sources earned from 1st April- 31st March of the financial year for which you are doing the advance tax calculations. Subtract all eligible deductions and exemptions. Compute tax on such income as per the tax regime you opted for. Reduce the amount of tax paid by way of TDS/TCS.

The Form 1095-A will tell you the dates of coverage, total amount of the monthly premiums for your insurance plan, the second lowest cost silver plan premium that you may use to determine the amount of your premium tax credit, and amounts of advance payments of the premium tax credit.

The amount of excess premium tax credit repayment, calculated on Line 29 of Federal Form 8962 Premium Tax Credit (PTC), has a different calculation if there was a self-employed health insurance deduction claimed on Line 16 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income.

A2. An eligible individual's total advance Child Tax Credit payment amounts equaled half of the amount of the individual's estimated 2021 Child Tax Credit. This amount was then divided into monthly advance payments.