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14077: Reporting Changes to the Advance Premium Tax Credit (ACA)


Fed Returns Generally

I received the Advance Payment of Premium Tax Credit (APTC) based on my income at the beginning of the year. My income changed significantly during the year, now I have to repay the credit. What should be done to avoid the repayment in the future?
 
The Advanced Premium Tax Credit is a payment during the year to your insurance provider that pays for part or all of the premiums for a qualified health plan covering you or an individual in your tax family. Your APTC eligibility is based on the Marketplace’s estimate of the PTC you will be able to take on your tax return. (See "Premium Tax Credit (PTC) Under the ACA" in Related Links below for more information on the Premium Tax Credit)
 
If you receive Advance Premium Tax Credit based on income at the beginning of the year, and your income changes during the tax year, it should be promptly reported to the Marketplace in order to adjust the amount of advanced credit received. If you fail to report required changes, the amount of APTC paid may be substantially different from the amount of PTC you can take on your tax return, and may result in a partial or full repayment of premiums received.
 
Per the 8962 Instructions:

Report changes in circumstances when you re-enroll in coverage and during the year. If APTC is being paid for an individual in your tax family (described later) and you have had certain changes in circumstances (see the examples below), it is important that you report them to the Marketplace where you enrolled in coverage. Reporting changes in circumstances promptly will allow the Marketplace to adjust your APTC to reflect the PTC you are estimated to be able to take on your tax return. Adjusting your APTC when you re-enroll in coverage and during the year can help you avoid owing tax when you file your tax return. Changes that you should report to the Marketplace include the following.

  • Changes in household income.
  • Moving to a different address.
  • Gaining or losing eligibility for other health care coverage.
  • Gaining, losing, or other changes to employment.
  • Birth or adoption.
  • Marriage or divorce.
  • Other changes affecting the composition of your tax family.
For more information on how to report a change in circumstances to the Marketplace, see HealthCare.gov or your State Marketplace website.

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