It's Time for a Premium Tax Credit Checkup
If you or anyone in your family receive advance payments of the premium tax credit, now is a good time to check on whether you need to adjust your premium assistance.
Because advance payments are paid directly to your insurance company (thereby lowering the out-of-pocket cost for your health insurance premiums), changes to your income or family size may affect your credit. Therefore, you should report changes that have occurred since the time that you signed up for your health insurance plan.
Changes in circumstances include any of the following and should be reported to your Marketplace when they happen:
- Increases or decreases in your household income including lump-sum payments; for example, a lump-sum payment of Social Security benefits
- Birth or adoption of a child
- Other changes affecting the composition of your tax family
- Gaining or losing eligibility for government-sponsored or employer-sponsored health care coverage as may occur when you start a new job
- Moving to a different address
Reporting the changes when they happen helps you to avoid getting too much or too little advance payment of the premium tax credit. Getting too much may mean that you owe additional money or receive a smaller refund when you file your taxes. Getting too little could mean missing out on premium assistance that reduces your out-of-pocket monthly premiums.
Changes in circumstances also may qualify you for a special enrollment period to change or get insurance through the Marketplace. In most cases, if you qualify for the special enrollment period, you generally have 60 days to enroll following the change in circumstances. Information about special enrollment can be found by visiting HealthCare.gov.
You can use the Premium Tax Credit Change Estimator to help you estimate how your premium tax credit will change if your income or family size changes during the year; however, this estimator tool does not report changes in circumstances to your Marketplace. To report changes and to adjust the amount of your advance payments of the premium tax credit, you must contact your Health Insurance Marketplace. You can find the Estimator at www.taxpayeradvocate.irs.gov/estimator/premiumtaxcreditchange
Don’t hesitate to call our office, if you have any questions about the Premium Tax Credit.