What happens if the advance premium tax credit received for the year ends up being more than the tax credit due?
Asked by: Kyleigh Casper | Last update: October 30, 2025Score: 4.1/5 (12 votes)
What happens if I overestimate my income for marketplace insurance?
If you overestimate your income and end up claiming less help than you are entitled to, the difference will be refunded to you when you file your income taxes the following year.
Does excess advance premium tax credit have to be repaid?
If your income is more than what you told us on your application, you may have to repay some or all of the advanced premium tax credits that you got. There are limits to the amount you may need to repay, depending on your income and if you file taxes as “Single” or another filing status.
How do I avoid paying back premium tax credit?
Report any changes in your income during the year to the Marketplace, so your credit can be adjusted and you can avoid any significant repayments at the end of the year.
How do I reconcile my advance premium tax credit?
To reconcile, you compare two amounts: the premium tax credit you used in advance during the year; and the amount of tax credit you qualify for based on your final income. You'll use IRS Form 8962 to do this. If you used more premium tax credit than you qualify for, you'll pay the difference with your federal taxes.
Advance Premium Tax Credit Repayment. How does it work?
What if the advance premium tax credit received for the year ends up being more than the tax credit due?
Reporting changes in circumstances
If you don't report the change and your advance credit payments are more than the premium tax credit you are allowed, you have to reduce your refund or increase the amount of tax you owe by all or a portion of the difference when you file your federal tax return.
Why did I lose my aptc?
Beginning with plan year 2025 eligibility determinations, if consumers fail to file federal income tax returns and reconcile APTC for two consecutive tax years, as verified with IRS data, consumers may lose their APTC.
What happens if I underestimate my income for Obamacare in 2024?
For the 2024 tax year, if you underestimated your income and received a larger tax credit than you were eligible for, you must repay the difference between the amount of premium tax credit you received and the amount you were eligible for.
How does advance premium tax credit affect tax return?
If at the end of the year you've taken more premium tax credit in advance than you're due based on your final income, you'll have to pay back the excess when you file your federal tax return. If you've taken less than you qualify for, you'll get the difference back.
What happens if you don't use all of your premium tax credit?
If you didn't receive all of the premium tax credit you're entitled to during the year, you can claim the difference when you file your tax return. If you're uncertain about your income for the coming year, remember that you can modify the amount of premium tax credit during the year if your income changes.
What is the grace period for the advanced premium tax credit?
Beneficiaries who qualify for the advanced premium tax credit (APTC) subsidy used to purchase a health benefit plan through the Covered California marketplace are allowed a premium payment grace period for delinquent premiums for three months before Health Net can disenroll the beneficiary.
What is the highest income to qualify for ACA?
In 2025, you'll typically be eligible for ACA subsidies if you earn between $15,060 and $60,240 as a single person. A family of four is eligible with a household income between $31,200 and $124,800.
What happens if I don't update my marketplace insurance?
If you don't update your income and household information: You could qualify for more savings than you're getting now. You could qualify for less savings and have to pay money back when you file your federal taxes.
What is an advance payment of the premium tax credit?
When you enroll, the Marketplace will determine if you are eligible for advance payments of the premium tax credit, also called advance credit payments or APTC. Advance credit payments are amounts paid to your insurance company on your behalf to lower the out-of-pocket cost for your health insurance premiums.
What happens if I don't report my 1095-A?
You can use Form 1095-A to reconcile any advance premium tax credits you received during the year with the amount of credits you were eligible to receive. If you fail to file a tax return reconciling those payments, you will not be eligible for premium tax subsidies in the next year.
Should you use an advanced premium tax credit?
Do people have to take the premium tax credit in advance? No. Most people want to get the credit in advance because they can't pay their entire monthly health insurance premiums without help, but if they choose, people can wait and receive the credit when they file their taxes.
How does the advance loan work for taxes?
Refund Advance loan is a no-interest loan that is repaid with your tax refund. File your taxes at a participating H&R Block office and apply between Jan. 3, 2025 and Feb. 28, 2025. If approved, a loan will be issued in one of five amounts ($250, $500, $750, $1,250, $4,000).
Is there a cliff on ACA subsidies for 2025?
For now, the subsidy enhancements will remain in place through the end of 2025. "If people are signing up now during open enrollment, their coverage will take effect in January, and it will cover them for the whole year. Their premiums won't change — they're good for 2025," Norris said.
How does health insurance subsidy affect tax returns?
If the tax subsidy is the same as the amount paid to your insurance on your behalf, there is no impact on your taxes. If you increased your income within the tax year, you may have received a larger credit than what you should have.
Who is eligible for the premium tax credit in 2024?
To be eligible for the premium tax credit, your household income must be at least 100 percent and, for years other than 2021 and 2022, no more than 400 percent of the federal poverty line for your family size, although there are two exceptions for individuals with household income below 100 percent of the applicable ...
How do I adjust my APTC?
You will use Form 8962 to reconcile the difference between the APTC made on your behalf and the actual amount of the credit that you may claim on your return. This filing requirement applies whether or not you would otherwise be required to file a return.
How does the premium tax credit affect my tax return?
You'll need to use Tax Form 8962 to determine your eligibility for the PTC. If you use more of the PTC than your final taxable income allows, you may need to repay the difference when you file your taxes, but if you use less than you qualify for, you may receive the difference as a refundable credit on your return.
What happens if I don't reconcile my premium tax credit?
If you don't reconcile, you won't be eligible for advance payments of the premium tax credit or cost-sharing reductions to help pay for your Marketplace health insurance coverage for the following calendar year.