When you apply for coverage in the Health Insurance Marketplace, you will find out of you qualify for what’s called a “Premium Tax Credit” that lowers your monthly premium. Your premium, of course, is the monthly amount you pay for your insurance plan.
The amount of your premium tax credit varies depending on the estimated household income for 2020 that you put on your Marketplace application.
Find out if your estimated 2020 income is in the range to qualify for a premium tax credit.
You can apply some or all of this tax credit to your monthly insurance premium payment. The Marketplace will send you tax credit directly to your insurance company, so you’ll pay less premium each month. This is called an “Advance Payment of the Premium Tax Credit.”
When your income changes, so will your premium tax credit.
If your income changes, or if you add or lose members of your household, your premium tax credit will probably change too. It’s vital to report income and household changes to the Marketplace as soon as possible.
If your income goes up or you lose a member of your household: You’ll probably qualify for a lower premium tax credit. You may want to reduce toe amount of tax credit you take in advance each month. That way you don’t wind up taking more credits than you qualify for.
If your income goes down or you gain a household member: You’ll probably qualify for a more significant premium tax credit. You may want to increase the amount of tax credit you take in advance so you have a lower premium bill each month.
If at the end of the year you have taken more advance payments of the premium tax credit than you are eligible for, you may have to pay the money back when you file your federal income tax return. This is called “reconciling” the advance payment of the premium tax credit and the actual premium credit you qualify for on your final 2020 income.
If you or someone you know may have questions relating to their Premium Tax Credit or for assistance in finding out if you qualify, please don’t hesitate to call us at (623) 889-7600 or fill out the brief contact form below and one of our local, licensed expert advisors will be happy to reach out to help you!