If you — or anyone on your tax return — purchased health coverage from a state or the federally-facilitated Health Insurance Marketplace and are eligible for the premium tax credit, you will have to file Form 8962, Premium Tax Credit, with your federal income tax return in 2015.
When you applied for Marketplace coverage in 2014, you could have chosen to have advance payments of the premium tax credit paid directly to your insurance company to lower your out-of-pocket cost for monthly premiums during the year. If you chose this option, you must file a tax return and attach Form 8962, Premium Tax Credit.
You can electronically file Form 8962, Premium Tax Credit, along with your federal tax return. Filing electronically is the easiest way to file a complete and accurate tax return. By electronically filing your tax return, many common errors may be avoided or corrected by the computer software. Depending on your income, you may even qualify to e-file for free by using Free File tax software.
Claiming the Premium Tax Credit
Only individuals who purchased coverage through the Health Insurance Marketplace may be eligible to claim a premium tax credit when filing a tax return in 2015.
In general, you or anyone on your tax return who enrolled in coverage through the Marketplace in 2014 may be eligible to claim a premium tax credit if you:
o are within certain income limits;
o do not file a Married Filing Separately tax return, unless you meet certain criteria; or
o cannot be claimed as a dependent by another person.
Additionally, the person on your tax return who enrolled must not have been eligible for other qualifying coverage, such as government-sponsored coverage or employer-sponsored coverage for the same months.
Reconciling advance payments of the Premium Tax Credit
If you chose this option, you must file your tax return and attach Form 8962, Premium Tax Credit, to reconcile any advance payments made directly by the government to your insurance provider during the year, even if you do not otherwise have to file a tax return. You do this by comparing any advance credit payments with the amount of the premium tax credit actually allowed on the federal income tax return.
If the premium tax credit computed on your federal income tax return is more than the advance credit payments, the additional amount of the credit will increase your refund or lower the amount of tax you owe.
If the credit on the tax return is less than the amount paid in advance, you will have to repay excess advance payments, which will increase the amount you owe or result in either a smaller refund or a balance due.
The Marketplaces are required to send Form 1095-A, Health Insurance Marketplace Statement, to individuals by Jan. 31, 2015. This form includes information about your coverage and any advance credit payments made directly to your insurance provider in 2014. Contact the Marketplace directly if you did not receive your Form 1095-A. You need Form 1095-A to accurately complete your tax return.
Reporting qualifying health care coverage
If you have minimum essential coverage, you will check a box indicating that you do have minimum essential coverage when you file your 2014 federal income tax return. If you — or anyone on your return — purchased a health plan through the Marketplace, this means you have minimum essential coverage. In addition to filing Form 8962, Premium Tax Credit, with your tax return, you will simply need to check a box on your tax return to indicate that you and your dependents had qualifying coverage for each month of 2014.
IRS.gov has up-to-date information that can help you right away. This includes easy-to-use tools to help answer tax questions, such as the Interactive Tax Assistant or the IRS Tax Map, each designed to help find answers to tax questions quickly and easily. You can also enter your topic or question in the search box on IRS.gov.
For more information about the premium tax credit, download Publication 5187, The Health Care Law: What’s New for Individuals & Families, or visit IRS.gov/aca. For more information about the Marketplace, visit HealthCare.gov or your state Marketplace website.