Will the premium tax credit return a refund?
Asked by: Prof. Keanu Wiza DVM | Last update: June 5, 2025Score: 4.7/5 (30 votes)
Do you get a tax credit back as a refund?
A refundable tax credit is a credit you can get as a refund even if you don't owe any tax. Tax credits are amounts you subtract from your bottom-line tax due when you file your tax return. Most tax credits can reduce your tax only until it reaches $0.
How does 1095-A affect my refund?
You will use the information from the Form 1095-A to calculate the amount of your premium tax credit. You will also use this form to reconcile advance payments of the premium tax credit made on your behalf with the premium tax credit you are claiming on your tax return.
Does aptc reduce tax refunds?
For tax years other than 2020, if the advance credit payments are more than the amount of the premium tax credit you are allowed, called excess APTC, you will add all – or a portion of – the excess APTC to your tax liability on Form 1040, Schedule 2. This will result in either a smaller refund or a larger balance due.
What happens to unused premium tax credit?
The bonus is that tax credits actually lower how much you owe and, even better, health insurance tax credits are actually refundable. Consider this, if you owe $2,000 in taxes and have an unused tax credit of $2,500, you'll get a check for $500.
Get a BIGGER tax REFUND with the PREMIUM TAX CREDIT
Will premium tax credit return a refund?
The premium tax credit – also known as PTC – is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace.
Can you get a refund for health insurance premiums?
The Premium Tax Credit is a refundable tax credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace, also known as the Exchange. The size of your Premium Tax Credit is based on a sliding scale.
How can I avoid paying back my 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.
Should I use all of my premium tax credits?
You can use all, some, or none of your premium tax credit in advance to lower your monthly premium. If you use more advance payments of the tax credit than you qualify for based on your final yearly income, you must repay the difference when you file your federal income tax return.
Does a 1095-C make me get a refund?
No, the 1095-C form just proves that you had health coverage. It would not affect your refund as long as you answered the Health Insurance questions accurately. You don't need your form 1095-C to file your tax return. TurboTax will ask you questions about your health coverage but your form 1095-C isn't needed.
What happens if I don't put my 1095-A on my taxes?
You will need Form 1095-A before you file your taxes; otherwise, you may have to submit an amended return later. 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.
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.
Which tax credit is refundable?
In U.S. federal policy, the two main refundable tax credits are the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC).
Will a refund appear as a credit?
When a merchant gives you a refund for a purchase made with a credit card, they don't refund the money to you directly. Instead, they ask the credit card issuer to credit your account for the return amount. The amount appears on your credit card statement as a statement credit.
Do you have to file taxes if you make less than $5000 a year?
Typically, if a filer files less than $5,000 per year, they don't need to do any filing for the IRS. Your employment status can also be used to determine if you're making less than $5,000.
How do premium tax credits affect my refund?
Advance payment of premium tax credit
On Line 26, you'll find out if you used more or less premium tax credit than you qualify for based on your final 2024 income. This will affect the amount of your refund or tax due. Include your completed Form 8962 with your 2024 federal tax return.
What disqualifies you from the premium tax credit?
For tax years other than 2021 and 2022, if your household income on your tax return is more than 400 percent of the federal poverty line for your family size, you are not allowed a premium tax credit and will have to repay all of the advance credit payments made on behalf of you and your tax family members.
How do you reconcile premium tax credits on their tax return?
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.
Why do I have to pay back advance premium tax credit?
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.
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.
How do I get a refund on my insurance premiums?
Communicate with Your Insurer: If you need to request a refund, contact your insurance company promptly and provide all necessary documentation. Clear communication will help expedite the refund process and minimize any potential issues.
Do you get a tax return on health insurance?
Get a refund or lower the amount of taxes you owe if you used less of the premium tax credit you qualified for or got an increase in the premium tax credit when you reconciled. You still need to include Form 8962 with your tax return.
What are the income limits for premium tax credit?
Premium tax credits are available to people who buy Marketplace coverage and whose income is at least as high as the federal poverty level. For an individual, that means an income of at least $15,060 in 2025. For a family of four, that means an income of at least $31,200 in 2025.