Affordable Care Act: Marketplace insurance and the Premium Tax Credit
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- čas přidán 1. 01. 2022
- Under the Affordable Care Act, you are entitled to a Premium Tax Credit if you purchase health insurance through the Federal or a state marketplace. This video explains the basics of the Premium Tax Credit and shows how it is calculated and reported.
To learn about what to consider when choosing a Marketplace plan, click here: • Which Marketplace Heal...
Additional Resources and Information:
You can find out all about marketplace health insurance at www.healthcare.gov
IRS Form 8962 "Premium Tax Credit": www.irs.gov/pub/irs-pdf/f8962...
Instructions for Form 8962 (these instructions contain the charts shown in the video): www/irs.gov/pub/irs-pdf/i8962.pdf
IRS Form 1095A: "Health Insurance Marketplace Statement": www.irs.gov/pub//irs-pdf/f109...
IRS Publication 5187: "The Affordable Care Act: What you and your Family Need to Know": www.irs.gov/pub/irs-pdf/p5187...
Investopedia: "Premium Tax Credit for 2021 Taxes": www.investopedia.com/premium-...
The Tax Geek on Twitter: @taxgeekusa
The Tax Geek on Reddit: www.reddit.com/r/askataxgeek
Image Credits:
The image of "Richard" was generated by thispersondoesnotexist.com and any resemblance between these images and any persons living or dead is coincidental and not intended.
Intro Music: "Bluesy Vibes" - Doug Maxwell - CZcams Audio Library
Background and Outro Music: George Street Shuffle, Kevin McLeod, incompetech.com via CZcams Audio Library
DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or investment advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or investment professional.
The information in this video is current as of date of publication, and is subject to changes enacted by Congress or the IRS.
Thank you! You have explained this better than the instructions sheet!
You're welcome! That was what I was aiming for in making the video
Ty helping me navigate these difficult waters.
You're very welcome!
The premium tax credit (PTC) is a refundable tax credit in the United States.
It is payable by the Internal Revenue Service (IRS) to eligible households that have obtained healthcare insurance by a healthcare exchange (marketplace) in the tax year.
It can be paid in advance directly to a healthcare insurance company to offset the cost of monthly health insurance premiums.
The tax credit is part of a host of Affordable Care Act tax provisions, introduced by the IRS in 2014, and is meant to extend health insurance coverage to 18 million lower and middle-income Americans.
thank you for uploading this video it was very helpful!
You're very welcome! I'm glad it was helpful.
thank you for that very clear explanation!
You're very welcome!
Excellent explanation, good job!
Thanks!
Wow this was so very helpful thank you very much... so happy understood everything yay. :)
Glad it was helpful!
Excellent video
Thank you! I'm glad you liked it!
Omg! Such a piece of helpful information, great job. A big help when someone is trying to be a responsible adult, hahaha. When did you figure out you were an adult?? when I start watching tax videos on YT hahaha. Thank you for this video.
You're very welcome. Glad it was helpful.
THANK YOU
You're very welcome.
Good day. I have a question regarding my parent's insurance plan this year. They estimated their income around $26,000; however, they have not been making any money so far. They are using the Ambetter Silver Plan via the Marketplace now. So are they or are they not eligible for the plan since they are making no income now ? If they are not eligible, do they have to pay any penalty fees and repay the APTC money (around $21k)? Thank you.
If their income is less than they estimated when they purchased the plan, they would not have to repay any of the Advanced Premium Tax Credit.
Thank you for your video. Im still very confused though on how to calculate all of that, too many numbers and Im not very good at that . Do you offer a service for doing this ? Is this something a tax accountant can do for you ? ( complete and file this form ) ? Im just really lost. Im very new to ACA insurance. Thank you
First of all, nobody calculates the ACA by hand. The purpose of the video was to provide overall education and information regarding the ACA and PTC. Unfortunately, for various reasons, I cannot provide direct advice or paid assistance to the viewers of this channel. The best thing to do if you're really confused is to engage a qualified Tax Professional in your community.
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I hope my situation is simple but I did not make enough money in 2022 to qualify for APTC (just unemployment in TX) but my broker had me signed up for "free" insurance since 2020 but lost my job at the end of 2021. I did not expect to still be unemployed but I also didn't understand that I needed at least 100% poverty income to qualify for this APTC in my research (my broker does all my insurance stuff). The Marketplace says I need to file in order to "reconcile" my PTC (have my 1095-A) but my income amounts are throwing off the tax software with alerts (which prompted me to do this research). I'm scared that I may have to repay these premium credits or get fined after I file. Do you have any advice?
You should not have to repay the APTC. At less than 100% of the Federal Poverty Line your "Applicable amount" is 0.00. Any APTC you received, up to the cost of the Second Lowest Cost Silver Plan would not have to be repaid. Work your return all the way to the end and check the result. You should be getting a refund for any income tax you had withheld on your unemployment.
@@TheTaxGeek I've been asking around and this is the first "positive" thing I've seen and also most accurate. I'm not sure what I did wrong at first but I ran the numbers again and finally found the page saying "Household Income Below FPL" after entering my 1095-A information. Specifically it mentions at the time of enrollment, my estimated earnings would be at least 100% FPL (basically I can claim PTC under this condition). Seeing this is a HUGE relief. I also see my withheld unemployment taxes potentially being refunded to me. So many thanks, I've actually lost sleep over the issue if you can believe that. You also gained a subscriber!
If I did not use the insurance at all for the whole year or even touch it can I get a refund for it even thought I’m being penalized for making more money? I never realized I was on the marketplace insurance and owe $3k… never used the insurance Though
No. Marketplace heath insurance is the same as any other kind of insurance. Even if you don't use it, you're still expected to pay for it. And the higher your income, the more you pay for the insurance.
I had health insurance from former employer Jan thru Apr. I applied for Covered CA, was charged $1 each month for May & Jun, then was switched to MediCal for rest of year (Jul thru Dec). My only payment to Covered CA & MediCal was $2.
I wasn't aware of Form 8962 but received letter from IRS requesting this information today! I am confused now! Do I need to calculate Premium Tax Credit?
I was a little puzzled when I read your comment, because if an 8962 is required by the IRS, any e-filed return will reject. Two possibilities: you either didn't file a return because you were not required to, or you mailed in your return. The two months through Covered CA was marketplace insurance for which you received an Advance Premium Tax Credit (that's why it was only $1/mo). Covered Ca (or their affiliate) should have sent you a Form 1095A, which you would use to prepare your 8962. If not, sign into Covered CA and you should be able to retrieve it on line. If you follow the instructions in the video very carefully, you should be able to complete the form, but I would be more comfortable bringing it to a professional, if I were you. If you were due a refund when you filed your return, you will not get it until they receive the form.
@@TheTaxGeek I mailed the return in mid March and got the letter from IRS yesterday. I was not aware of the 8962 and only submitted 1095A & B forms. I'll phone the IRS indicated on the notice to clarify the materials needed to complete the filing. I am confused that if my out of pocket expense was $2, am I still qualify for more tax credit ?! I truly appreciate your help! Have a nice weekend!
You may get your $2 back, and it's equally unlikely you'll have to repay any Advance Premium Tax Credit you received. The IRS simply wants the reconciliation (on Form 8962), even if it doesn't change anything.
@@TheTaxGeek The yearend 1095A statement received had many numbers missing! I looked up the Kaiser notices and letters and found the premium enrolled and the APTC. I followed your instruction in this video, made a corrected 1095A and filled out the 8962. I should pay back $186 X 2 (May & June), mailed reply this afternoon. If my math was not 100% accurate, it should be very close. IRS will let me know.
I really appreciate your help. Take care!
Taxpayer was terminated from job and lost benefits as of Feb 1, 2021.
Spouse of taxpayer applied for coverage on exchange which went into effect in May 2021 and per 1095-A was in effect thru end of 2021. Rec'd $1532 in PTC each month towards premiums.
Taxpayer filed a grievance and was reinstated his benefits as of 11/01/2021 and made them retro to his termination date of Feb 1, 2021.
Taxpayer rec'd 1095-C for 2021 showing coverage for entire family for all of 2021.
So now I have the 1095-A showing PTC of $12,526 for 2021. How to account for on tax return so they don't have to pay back entire PTC? Very confusing HAs anyone seen anything like this before? I am considering just telling them to go elsewhere for this.
To make is more confusing, they separated in April 2021 but are still married. Thinking they have to file MFJ because of the PTC dilemma.
Thanks for any advice.
Scott
Wow. The taxpayer's former employer did the taxpayer no favors by making those benefits retroactive.The law states that the PTC is not available to anyone who "is eligible for affordable employer provided coverage." Which, now, he is, and since he has a 1095C stating full employer paid coverage, that conflicts with the 1095A. What they should have done is contacted the Marketplace when the benefits were reinstated. That would have at least stopped the last two payments of the APTC. I was thinking that if their income was pretty low, repayment limitations might kick in, but I don't think in the case of total ineligibility, there are any limits on repayment. (In fact I know so, I had a client come to me who had filed MFS, and indeed, she had to repay the entire PTC)
I would still encourage the taxpayer to contact the Marketplace and explain the situation, and maybe they can offer some sort of solution. But I can't think of a solution where either the taxpayer or the insurer wouldn't have to repay the PTC.
I'll keep thinking about it and ask around, and If I come up with something else, I'll comment again. Good luck.
What if my marketplace insurance auto renewed and I found myself making 400% the poverty level before discontinuing it?
You may still qualify for some premium tax credit. Any excess you were advanced, unfortunately, would have to be paid back.
Any Tax Credits for single people with no kids?
Unless your income is under $21,700/year and you can claim the Earned Income Credit, or you attended college or university and claim an education credit. Unfortunately, the opportunity for tax credits for a single, childless person are not very plentiful--I can tell you that from a lifetime of experience at being single and childless.
also , what is your email? Id like to see if I can hire you. Thank you.
There is no calculator online that explains what if I ended up making less than 100% of the poverty level... I am at 25%
If it turns out that your actual family income is less than 100% of the Federal Poverty level, you will still get a Premium Tax Credit equal to your Second Lowest Cost Silver Plan premium.
@@TheTaxGeek Can you explain what a "applicable tax payer" is? I fall under the FPL as well and I qualify for the PTC, but the tax program mentions being a applicable tax payer. Thank you!
I haven't heard of the term. I might assume it's a member of the household who's required to file a tax return.
Thought it was based on 'taxable' income? What if people receive other benefits or on disabily or SNAP or rental subsidy, I don't so not an expert. Are benefits considered 'income'? btw, Confusing for contractors during COVID to estimate income! Could be easier. IRS has a mind of their own when calculating and receiving taxes! To many contracted middle men like AARP help with inconsistent inputs. Trump was right, for once. Our tax system is a mess!
I won't argue with you that our tax system is a mess. The fact that this channel has to exist at all is clear evidence of that. The "family" income that the PTC is based on does refer to taxable income of those members of the family that are required to file a tax return. Non-taxable Social Security or SSI, or other government assistance benefits are not included in this amount. And yes, it's very difficult to estimate income if your income is highly erratic, but you can, periodically though the year, modify your estimated income and adjust the Advance Premium Tax Credit.
@@TheTaxGeek thank you for your thoughtful response. After paying in full many years, all of a sudden small outstanding balances transferred to 2017 in lump. I requested a history going back to 2014, but payments weren't entered. IRS was helpful, and I need followup, but after viewing history, none of the due taxes matched anything close to my cancelled check. Like someone elses returns? All in October or August, yes penalties were itimized /accrued. Deceased husband's pension, which I have payed taxes on all along, probably should have had withholding all these years and only get 1/3 of what he was receiving when he was alive. Lesson here, make sure beneficiaries are aware of everything with titles and deeds transferred too. Just a portion of the mayhem. Used to worry me at first, but. I more! I'll just keep plugging along and paying the five different regional and local offices bc that's what a good law abiding citizen does. Have t looked into forgiveness. Just want the numbers to reflect what I actually payed and amounts to be Correct. I'll let you have your Saturday Eve now, but do appreciate your imput.💞
@@TheTaxGeek I need help! A friend of mine was approved for insurance through ambetter, in 2021. Well this year they are asking for a tax return, but he is waiting for disability and only gets around 15k a year. But he doesn't have a job this money he is borrowing/gifted. So what do we do?? Is he going to loose his insurance? Pls help
He needs to file a "pro-forma" return, reporting $1 in income (you can put it in as "interest"). But, if you apply for insurance and your income is below the Federal poverty line, the Marketplace will suggest you apply for Medicaid, because the PTC is usually not available to those with incomes below the Federal Poverty level. NOTE: If you're asking a question, please put it in as a comment, and not as a response to another comment. I almost missed this one!