To determine has to reconcile your premium tax credit with the premium tax credit allowed a tax filer uses his or her actual household income, family size, and applicable second lowest cost Silver plan to compute the allowed premium tax credit for the year. The tax filer uses Form 8962, Premium Tax Credit (PTC), to compute the premium tax credit and reconcile the allowed premium tax credit with the advance payments made for the tax filer and his or her family.
The Marketplace provides documentation (Form 1095-A, Health Insurance Marketplace Statement) to the tax filer to assist with this computation and reconciliation. The information reported to tax filers on Form 1095-A is also reported to the IRS.
• If a tax filer’s allowed premium tax credit is more than his or her advance payments of the premium tax credit (i.e., a net premium tax credit), the tax filer either increases his or her refund or reduces his or her tax liability by the amount of the net premium tax credit.
• If the tax filer’s allowed premium tax credit is less than his or her advance payments of the premium tax credit, the tax filer has excess advance credit payments. The tax filer must increase his or her tax liability by the amount of the excess advance payments of the premium tax credit, although the repayment amount may be limited for tax filers with household incomes below 400% of the FPL for the tax filer’s family size.
• Because advance payments of the premium tax credit are based on projected household income, family size, and coverage family, tax filers should promptly report changes in circumstances to the Marketplace. Promptly reporting changes will reduce the likelihood of large differences between the tax filer’s advance payments of the premium tax credit and his or her allowed premium tax credit.
*information provided by the CMS