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IRS.gov Website
Publication 17
taxmap/pub17/p17-185.htm#en_us_publink100019155

Chapter 37
Premium Tax Credit (PTC)(p241)


What's New(p241)


taxmap/pub17/p17-185.htm#en_us_publink100037539
Health coverage tax credit (HCTC).(p241)
The HCTC is a tax credit that pays a percentage of health insurance premiums for certain eligible taxpayers and their qualified family members. The HCTC and the PTC are different tax credits that have different eligibility rules. For 2015, if you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient, reemployment TAA recipient, Pension Benefit Guaranty Corporation payment recipient, or qualifying family member, you may be able to take the HCTC for health insurance coverage purchased through a Marketplace. However, you cannot continue to take the HCTC for health insurance coverage purchased through a Marketplace starting in tax year 2016. If you think you may be eligible for the HCTC, see Form 8885 and its instructions or visit www.irs.gov/HCTC before completing Form 8962.

Reminder(p241)


taxmap/pub17/p17-185.htm#en_us_publink100041407
Report changes in circumstances when you re-enroll in coverage and during the year.(p241)
If advance payments of the premium tax credit (APTC) are being paid in 2016 for an individual in your tax family (described later) and you have had certain changes in circumstances (see the examples below), it is important that you promptly report them to the Marketplace where you enroll. Reporting changes in circumstances promptly will allow the Marketplace to adjust your APTC to more accurately reflect the premium tax credit (PTC) you are estimated to be able to take on your tax return. Adjusting your APTC when you re-enroll in coverage and during the year can help you avoid owing tax when you file your tax return. Changes that you should report to the Marketplace include the following.
  • Changes in household income.
  • Moving to a different address.
  • Gaining or losing eligibility for other health care coverage.
  • Gaining, losing, or other changes to employment.
  • Birth or adoption.
  • Marriage or divorce.
  • Other changes affecting the composition of your tax family.
For more information on how to report a change in circumstances to the Marketplace, see healthcare.gov or your State Marketplace website.
Reminder from the IRS: If you need health coverage, visit healthcare.gov to learn about health insurance options that are available for you and your family, how to purchase health insurance, and how you might qualify to get financial assistance with the cost of insurance.
taxmap/pub17/p17-185.htm#en_us_publink100016958
You may be able to take the PTC only for health insurance coverage in a qualified health plan purchased through a Health Insurance Marketplace (also known as an Exchange). This includes a qualified health plan purchased on healthcare.gov or through a State Marketplace.
This chapter provides an overview of the following.

taxmap/pub17/p17-185.htm#TXMP3dae7134

Useful items

You may want to see:


Publication
 974 Premium Tax Credit (PTC)
Form (and Instructions)
 1095-A: Health Insurance Marketplace Statement
 8962: Premium Tax Credit (PTC)
taxmap/pub17/p17-185.htm#en_us_publink1000174905

What is the Premium Tax Credit (PTC)?(p241)

rule
taxmap/pub17/p17-185.htm#en_us_publink100022974

Premium tax credit (PTC).(p241)

rule
The PTC is a tax credit for certain people who enroll, or whose family member enrolls, in a qualified health plan. The credit provides financial assistance to pay the premiums for the qualified health plan offered through a Marketplace by reducing the amount of tax you owe, giving you a refund, or increasing your refund amount. You must file Form 8962 to compute and take the PTC on your tax return.
taxmap/pub17/p17-185.htm#en_us_publink100022975

Advance payment of the premium tax credit (APTC).(p241)

rule
APTC is a payment during the year to your insurance provider that pays for part or all of the premiums for a qualified health plan covering you or another individual in your tax family. Your APTC eligibility is based on the Marketplace’s estimate of the PTC you will be able to take on your tax return. If APTC was paid for you or another individual in your tax family, you must file Form 8962 to reconcile (compare) this APTC with your PTC. If the APTC is more than your PTC, you have excess APTC and you must repay the excess, subject to certain limitations (provided in Table 5 in the Instructions for Form 8962). See Alternative calculation for year of marriage next for a special rule that may reduce your excess APTC if you got married in 2015. If your PTC is more than the APTC, you can take the difference as a tax credit on your tax return, which will reduce your tax payment or increase your refund.
The Marketplace determined your eligibility for 2015 APTC using projections of your income and your number of personal exemptions when you enrolled in a qualified health plan. If this information changed during 2015 and you did not promptly report it to the Marketplace, the amount of APTC paid may be substantially different from the amount of PTC you can take on your tax return. See Report changes in circumstances when you re-enroll in coverage and during the year, earlier, for changes that can affect the amount of your PTC.
taxmap/pub17/p17-185.htm#en_us_publink100022976
Alternative calculation for year of marriage.(p241)
If you got married during 2015 and APTC was paid for an individual in your tax family, you may want to use the alternative calculation for year of marriage, an optional calculation that may reduce the amount of excess APTC you would have to repay under the general rules. You will determine your eligibility using the Instructions for Form 8962 and compute the alternative calculation using Pub. 974.