Health Insurance and Your Federal Income Tax Return

I had health insurance last year through a Marketplace plan and also received advanced premium tax credits to reduce my monthly premium. Since the Marketplace already determined that I was eligible for the tax credit, do I still have to file a federal income tax return for the year?

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Yes. You are required to file a federal income tax return for any year in which you received a premium tax credit. When you file, you will have to calculate how much tax credit you were actually eligible for in that year. The Marketplace determination you received last year was based on your good faith estimate of what your annual income would be. When you file your tax return, you will report your actual income. If your actual income turned out to be higher than you had estimated, you may have to repay some or all of the advanced premium tax credit (APTC) that was paid on your behalf during the year. If your actual income turned out to be lower than you had estimated, you will be able to claim additional tax credit amounts as a tax refund.
To calculate this, you will need two special tax forms. In January you will receive a form 1095-A in the mail from your health insurance Marketplace.  This form will indicate the amount of APTC that was paid to your health plan last year. When you file your federal income tax return, you will also need to file Form 8962. The instructions for Form 8962 will walk you through the steps to calculate the amount of tax credit that you were eligible for based on a final calculation of your actual income. Once you’ve completed this form, you will know whether you are required to repay some of the APTC or whether you are owed additional premium tax credit. Keep in mind, that if your income is under 400% of the federal poverty line (FPL), that there are limits on how much you will have to repay.

While we have made every effort to provide accurate information in these FAQs, people should contact the health insurance Marketplace or Medicaid agency in their state for guidance on their specific circumstances.

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