For the purposes of the premium tax credit, your household income is your modified adjusted gross income plus the tax income of each other family member (see Question 6) who must file a federal income tax return. Modified adjusted gross income is the gross income adjusted on your federal income tax return plus any excluded foreign income, non-taxable social security benefits (including Level 1 railway retirement benefits), and tax-exempt interest received or accrued during the taxation year. It does not include Supplementary Security Income (SSI). Note: Federal poverty guidelines – sometimes referred to as the “federal poverty line” or FPL – give an amount of income that counts as the poverty level for the year, based on family size. The Department of Health and Human Services (HHS) establishes the federal poverty guideline each year. The government usually adjusts revenue limits each year to account for inflation. At the beginning of each calendar year, the Federal Register publishes a table reflecting these amounts. This information can also be found on the HHS website. HHS offers three federal guidelines on poverty: one for residents of the 48 contiguous states and D.C., one for Alaskans, and one for Hawaiians. For the purposes of the premium tax credit, eligibility for a given year is based on the most recent federal poverty guidelines published on the first day of the annual open registration period.
For example, the 2018 tax credit is based on the 2017 LPF. For more information, see the instructions for Form 8962. If you sign up for Marketplace coverage and receive QSEHRA coverage that is affordable, you may not receive premium tax credit for your Marketplace coverage during the months when QSEHRA is affordable coverage. If the QSEHRA is not affordable coverage and you receive a one-month premium tax credit, you will receive the QSEHRA, you will have to reduce your TPC for the month of the eligible monthly benefit granted to you under the QSEHRA. Notice 2017-67 PDF, Questions 65-71, provides more information on how to determine if a QSEHRA is affordable and how to calculate your premium tax credit if the QSEHRA is prohibitive. If you have an employer-sponsored plan, including retirement coverage, this is an essential minimum coverage, you are not eligible for the premium tax credit for your Marketplace coverage, even if the employer plan is prohibitive or does not offer a minimum value. You may be eligible for a premium tax credit for the coverage of another family member who subscribes to Marketplace coverage and is not enrolled in the Employer Plan. If your employer offers affordable coverage for yourself, you are generally not eligible for the premium tax credit.
However, the regulations in Section 36B of the Internal Revenue Code provide a safe haven for employees for certain market affordability provisions. Under the Employee Safe Harbor, Employer-sponsored coverage will be considered prohibitive to you if (1) you have provided the Marketplace with accurate information about the cost of Employer-sponsored coverage and (2) the Marketplace has determined that you are entitled to upfront Premium Tax Credit (CTA) payments because the Employer-sponsored coverage is based on on your projected household income. was unaffordable. In these circumstances, you would still be eligible for the premium tax credit if you met the other eligibility criteria, although employer-sponsored coverage would have been affordable based on your actual household income. The Employee Safe Harbor does not apply to you if, in reckless disregard of the facts, you have provided a market with false information about the portion of the employee`s annual self-coverage premium under the plan. If you purchased coverage through the Marketplace, you should receive Form 1095-A, Health Insurance Market Statement, from your Market by early February. If this form indicates that the APTC was paid on behalf of a family member, you must complete Form 8962, Premium Tax Credit (TCO) to reconcile these advance payments. Form 1095-A contains the information you need to complete Form 8962. If you have any questions about the information on Form 1095-A or how to obtain Form 1095-A, you should contact your Marketplace directly. The IRS is unable to answer questions about the information on your Form 1095-A or missing or lost forms. If you or a family member received advance premium tax credit payments through the Health Insurance Market for taxation years other than 2020, you must complete Form 8962, Premium Tax Credit PDF and attach it to your tax return.
You will receive Form 1095-A, Health Insurance Market Declaration, which provides you with information about your health insurance. Use the information on Form 1095-A to complete Form 8962 to reconcile advance payments to the premium tax credit on your tax return. If you file your return without reconciling your advance payments, your repayment will be delayed. You must file a tax return for this purpose, even if you are not required to do so. If you use separate declaration status for marriage declarations, your family size will only include your spouse if you claim a personal exemption deduction for your spouse. Otherwise, the size of your family does not include your spouse. For taxation years other than 2020. If the initial payments are greater than the amount of the premium tax credit you are entitled to receive, called overpayments, add all – or part – of the overpayments to your tax liability on Form 1040, Schedule 2. This will result in either a smaller repayment or a larger balance due. An employer-sponsored plan is generally affordable if the portion of the annual premium you must pay for self-contained coverage that meets the minimum value requirement (see Question 12) does not exceed 9.5% of your household income, but this percentage is adjusted annually. For plan years beginning with: An employer-sponsored plan provides a minimum value if the plan covers at least 60% of the total eligible costs for the services covered. The plan must also provide significant coverage for hospitalization and medical services.
Starting in 2014, your employer will need to provide you with a document called a summary of benefits and coverage. This document will give you information about the benefits and coverage of your employer-sponsored plan, including whether the plan offers a minimum value. In addition, under the Fair Labour Standards Act, most employers will give employees one-time notice of their market options and their potential eligibility for a premium tax credit. .