Am I eligible for the Premium Tax Credit for health insurance?

by | May 9, 2025 | Individual Taxes, Tax Credits

Here’s what HIVE AI had to say about “Am I eligible for the Premium Tax Credit for health insurance?”:

Eligibility for the Premium Tax Credit for Health Insurance

Yes, you may be eligible for the Premium Tax Credit (PTC) for health insurance if you meet certain requirements. The PTC is designed to help make purchasing health insurance more affordable for people with low to moderate incomes.

Basic Eligibility Requirements

To qualify for the Premium Tax Credit, you must meet all of the following criteria:

  • Purchase insurance through a Health Insurance Marketplace: You, your spouse, or a dependent must be enrolled in health insurance through the Health Insurance Marketplace (Exchange) Net Premium Tax Credit You may be eligible to claim the premium tax credit if you, your spouse, or a dependent enrolled in health insurance through the Health Insurance Marketplace. Dawson U.S. Tax Court Opinions: Steven A. McGuire & Robin L. McGuire
  • Income requirements: Your household income must be between 100% and 400% of the Federal Poverty Line (FPL) for your family size The PTC is available to households with incomes between 100% and 400% of the Federal poverty line. Sec. 36B(c)(1)(A). Dawson U.S. Tax Court Opinions: Massoud Fanaieyan & Ziba Fanaieyan To be eligible, a taxpayer’s annual household income must fall between 100% and 400% of the federal poverty line. § 36B(c)(1)(A). Dawson U.S. Tax Court Opinions: George Azeh & Daniele Ambatta
  • Filing status: You cannot file as Married Filing Separately Do not file a Married Filing Separately tax return (unless you qualify for a special rule that allows certain victims of domestic abuse and spousal abandonment to claim the Premium Tax Credit using the Married Filing Separately filing status); IRS – Questions and answers on the Premium Tax Credit
  • Dependency status: You cannot be claimed as a dependent by another person Cannot be claimed as a dependent by another person; IRS – Questions and answers on the Premium Tax Credit
  • No other qualifying coverage: You must not be eligible for affordable coverage through an employer plan or government program In the same month, you, or a family member: + Enroll in coverage (excluding “catastrophic” coverage) through a Marketplace + Are not able to get affordable coverage through an eligible employer-sponsored plan that provides minimum value + Are not eligible for coverage through a government program, like Medicaid, Medicare, CHIP or TRICARE IRS – Questions and answers on the Premium Tax Credit IRS – The Premium Tax Credit – The basics

How Household Income and Family Size Are Determined

Your eligibility is based on:

  • Household income: This is the sum of the modified adjusted gross income (MAGI) of you, your spouse (if filing jointly), and any dependents who are required to file a tax return Household income is the sum of the taxpayer’s modified adjusted gross income (MAGI), the MAGI of the taxpayer’s spouse if a joint return is filed, and the MAGI of the taxpayer’s dependents who are required by I.R.C. § 1 to file a tax return for the taxable year. IRS Determination-201949001
  • Modified adjusted gross income (MAGI): Your adjusted gross income plus certain additions Under I.R.C. § 36B(d)(2)(B) of the Code, an individual’s MAGI is his or her adjusted gross income (within the meaning of I.R.C. § 62), increased by Social Security benefits not included in gross income under I.R.C. § 86, untaxed foreign earned income, and tax-exempt interest. The statutory language of I.R.C. § 36B is clear that a taxpayer must include in MAGI Social Security benefits received during the taxable year that were not included in gross income. IRS Determination-201949001
  • Family size: The number of individuals for whom you can claim a personal exemption deduction When determining family size, the size of the family is equal to the number of individuals the taxpayer is permitted to deduct as personal exemptions. § 36B(d)(1). Dawson U.S. Tax Court Opinions: George Azeh & Daniele Ambatta The taxpayer’s family size is the number of individuals for whom the taxpayer may claim a personal exemption deduction. Sec. 1.36B-1(d), Income Tax Regs. Dawson U.S. Tax Court Opinions: Kevin Wesley Gates & Kathleen Karen Gates

Advance Premium Tax Credit

You may receive the benefit of the Premium Tax Credit in advance:

  • Advance payments: The Marketplace can make advance payments of the credit directly to your insurance company to lower your monthly premiums Advance payment of the premium tax credit (APTC). APTC is a payment made for coverage during the year to your insurance provider that pays for part or all of the premiums for the coverage of you or an individual in your tax family. Dawson U.S. Tax Court Opinions: Steven A. McGuire & Robin L. McGuire The APTC is available in advance during the year to eligible taxpayers and is paid directly from Treasury to the taxpayer’s qualified health plan. Dawson U.S. Tax Court Opinions: George Azeh & Daniele Ambatta
  • Reconciliation requirement: If you receive advance payments, you must file a tax return to reconcile the advance payments with the actual credit you’re entitled to Your APTC eligibility is based on the Marketplace’s estimate of the PTC you will be able to take on your tax return. If APTC was paid for you or an individual in your tax family, you must file Form 8962 to reconcile (compare) this APTC with your PTC. If the APTC is more than your PTC, you have excess APTC and you must repay the excess, subject to certain limitations. If your PTC is more than the APTC, you can reduce your tax payment or increase your refund by the difference. Dawson U.S. Tax Court Opinions: Steven A. McGuire & Robin L. McGuire

How to Claim the Credit

To claim the Premium Tax Credit:

  • Complete Form 8962: You must complete this form to determine your credit amount Complete Form 8962 to determine the amount of your premium tax credit, if any. Dawson U.S. Tax Court Opinions: Steven A. McGuire & Robin L. McGuire
  • Attach to your tax return: Form 8962 must be attached to your Form 1040 or 1040-SR a taxpayer who receives the benefit of advance payments of the premium tax credit (advance credit payments) under section 36B must file an income tax return for that taxable year on or before the due date for the return (including extensions of time for filing) and reconcile the advance credit payments. Tresuary Reg. 1.6011-8

Benefits of the Premium Tax Credit

The Premium Tax Credit offers significant financial assistance:

  • Reduces premium costs: The credit helps pay for health insurance premiums The premium tax credit helps pay for this health insurance. Dawson U.S. Tax Court Opinions: Steven A. McGuire & Robin L. McGuire
  • Refundable credit: The credit is refundable, so you can get it even if you owe little or no income tax The premium tax credit is refundable, so even if you have little or no income tax liability you still may benefit. IRS.gov Tax Topics

Conclusion

The Premium Tax Credit can make health insurance more affordable if you purchase coverage through the Health Insurance Marketplace and meet the income and other eligibility requirements. If you think you might qualify, you can:

  • Visit Healthcare.gov to explore your coverage options
  • Use the IRS Interactive Tax Assistant to determine your eligibility
  • Complete Form 8962 with your tax return to claim the credit

Remember that if you receive advance payments of the Premium Tax Credit, you must file a tax return to reconcile those payments, even if you wouldn’t otherwise be required to file.

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