Should I claim a premium tax credit in advance, at the end of the year, or some of both?

That’s up to you. You can have tax credits paid directly to your health plan each month to reduce your monthly premium right away, or, if you can afford to, you can pay the entire health plan premium yourself up front and collect the premium tax credit in a lump sum next year when you file your tax return. Alternatively, you can have some of the tax credit paid directly to your insurer in advance but save some to claim as a refund when you file your annual tax return.

If you don’t know for sure what your income for the coverage year will be when you apply, provide your best estimate. Later, when you file your tax return, the IRS will compare your actual income to the amount of premium tax credit you claimed in advance. If you underestimated your income and claimed too much premium tax credit, you will likely have to repay all of the difference paid on your behalf when you file your tax return the following year. 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. Also, you can modify the amount of premium tax credit during the year if your income changes.