Paul Sanchez
If you purchased health insurance through the Health Insurance Marketplace, you must report it when filing your federal income tax return. The Health Insurance Marketplace is a service that allows eligible taxpayers to purchase health care insurance during the open enrollment period or special enrollment periods. Those who have enrolled in a health plan through the Marketplace will receive a Form 1095-A, Health Insurance Marketplace Statement, which provides information on coverage dates, monthly premiums, and any advance payments of the premium tax credit. This form is essential for calculating the amount of premium tax credit one can claim on their tax return. It is important to note that any changes in income or family size should be reported promptly to the Marketplace, as they may impact the amount of advance tax credits received.
| Characteristics | Values |
|---|---|
| Do you need to report marketplace insurance on taxes? | Yes, if you or anyone in your household enrolled in a health plan through the Health Insurance Marketplace, you need to report it on your taxes. |
| How to report it? | You will receive Form 1095-A, Health Insurance Marketplace Statement, which you will use to calculate the amount of your premium tax credit. |
| When to report it? | By mid-February. |
| What if Form 1095-A is incorrect? | Contact the state or federal Marketplace from which you received coverage. |
| What if I don't report changes in my circumstances? | Changes in circumstances, such as income or family size, may affect your advance payments of the premium tax credit. |
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Form 1095-A
If you or anyone in your household enrolled in a health plan through the Health Insurance Marketplace, you will receive Form 1095-A, also known as the Health Insurance Marketplace Statement. This form is sent by the Marketplace and not the IRS. Form 1095-A contains information about Marketplace plans that any member of your household enrolled in, during the previous year.
You must receive Form 1095-A before filing your taxes. If there are any errors or discrepancies in the information on Form 1095-A, you should contact the Marketplace Call Center. The Marketplace may then send you a corrected Form 1095-A, after which you may need to amend your tax return.
Using the information from Form 1095-A, you must complete and file Form 8962, Premium Tax Credit. This form is used to reconcile the advance payments of the premium tax credit with the amount you are claiming on your tax return. The IRS will verify the information on Form 8962 by comparing it to the details received from the Marketplace and your tax return.
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Premium tax credits
The premium tax credit is a refundable tax credit that helps eligible individuals and families with low or moderate incomes afford health insurance purchased through the Health Insurance Marketplace. The size of the premium tax credit is based on a sliding scale, meaning that those with lower incomes receive a larger credit to help cover the cost of their insurance.
When you apply for Marketplace coverage, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year. This estimate is based on information you provide about your family composition, projected household income, and other factors, such as whether those you are enrolling are eligible for other, non-Marketplace coverage.
Based on this estimate, you can decide if you want to have all, some, or none of your estimated credit paid in advance directly to your insurance company to lower your monthly premiums. This is called an "advance payment of the premium tax credit". If your income changes, or if there are changes to your family composition, your premium tax credit will probably change too. It is important to report income and household changes to the Marketplace as soon as possible.
If you choose to have advance payments of the premium tax credit made on your behalf, you will need to reconcile the amount paid in advance with the actual credit you compute when you file your tax return for the year. Either way, you will complete Form 8962, Premium Tax Credit ?(PTC) and attach it to your tax return for the year.
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Advance payments
If you purchased health insurance through the Health Insurance Marketplace, you will receive a Form 1095-A, Health Insurance Marketplace Statement, at the beginning of the tax filing season. This form will show the total monthly health insurance premiums paid to the insurance company you selected through the Marketplace. It will also list the amount of premium assistance you received in the form of advance payments of the premium tax credit that were paid directly to your insurance company, if any.
The premium tax credit is a refundable tax credit designed to help eligible individuals and families with low or moderate incomes afford health insurance purchased through the Health Insurance Marketplace. When you enrol in Marketplace insurance, you can choose to have the Marketplace compute an estimated credit that is paid to your insurance company to lower what you pay for your monthly premiums (advance payments of the premium tax credit, or APTC). Or, you can choose to get all of the benefits of the credit when you file your tax return for the year.
If you chose to have advance payments of the premium tax credit paid directly to your insurance company, you must complete Form 8962, Premium Tax Credit, and file a federal income tax return, even if you are otherwise not required to file. You are required to reconcile, or compare, these payments to the premium tax credit you'll compute for your tax return. Even if you did not choose to receive advance payments, you must file a federal income tax return to claim the premium tax credit. Filing your return without reconciling your advance payments will delay your refund and may affect future advance credit payments.
People who receive advance payments of the premium tax credit will need to file taxes for the year in which they receive them. For example, someone who received advance payments of the credit for the 2024 calendar year will need to file a tax return and reconcile their APTC for 2024 before the April 2025 deadline.
Changes in circumstances, such as increases or decreases in your household income or family size, may affect your advance payments of the premium tax credit. When you report a change in circumstances, you may become eligible for a special enrollment period, which allows you to purchase health care insurance through the Marketplace outside of the open enrollment period.
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Income changes
If you have purchased health insurance through the Marketplace, you should receive a Form 1095-A, a Health Insurance Marketplace Statement, at the beginning of the tax filing season. This form will be available by mid-February at the latest, and it may be available in your Marketplace account from mid-January to February 1. This form will detail the total monthly health insurance premiums paid to the insurance company you selected through the Marketplace.
It is important to report any income changes to avoid surprises. A drop in income should be reported, which could result in bigger monthly subsidies. Similarly, a rise in income should also be reported. You should also make sure your account reflects other life changes, such as marriage or a new member of your household, which can also impact the size of the aid.
To report income changes, you will generally need to fill out Form 8962, Premium Tax Credit, and file a federal income tax return. This form will allow you to compare the advance amount you used to the amount you qualify for based on your final income. If you used too much, you will repay it via taxes, and if you used too little, you can claim the difference as a credit.
If you receive a Form 1095-A with incorrect information, you should contact the state or federal Marketplace from which you received coverage. The Marketplace may need to send you a corrected Form 1095-A, and you may need to amend your return.
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Form 8962
If you purchased health care insurance through the Marketplace, you should receive a Form 1095-A, Health Insurance Marketplace Statement. Form 1095-A reports the total monthly health insurance premiums paid to the insurance company you selected through the Marketplace. It also lists the amount of premium assistance received in the form of advance payments of the premium tax credit that were paid directly to your insurance company, if any.
Using the information on your Form 1095-A, you must complete and file Form 8962, Premium Tax Credit. The IRS verifies the information on your Form 8962 by comparing it to information received from the Marketplace and to other information you entered on your tax return. Form 8962 is used to reconcile the advance payments of the premium tax credit with the premium tax credit you are claiming on your tax return. This means you will compare the advance amount you used to the amount you qualify for based on your final income. If you used too much, you will repay it via taxes. If you used too little, you can claim the difference as a credit.
If advance payments of the premium tax credit were made on your behalf, and you do not file a tax return reconciling those payments, you will not be eligible for advance payments of the premium tax credit or cost-sharing reductions to help pay for your Marketplace health insurance coverage in the next year. This means you will be responsible for the full cost of your monthly premiums and all covered services. Additionally, the IRS may contact you to pay back some or all of the advance payments of the premium tax credit.
You may receive more than one Form 1095-A if members of your household were not all enrolled in the same health plan, you updated your family information during the year, you switched plans during the year, or you had family members enrolled in different states. If you received more than one Form 1095-A that reports coverage for different months, you will enter the information for the corresponding month on Form 8962. If you received more than one Form 1095-A that reports coverage for the same month, refer to the instructions for Form 8962 for more information.
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Frequently asked questions
Form 1095-A is a Health Insurance Marketplace Statement that you should receive at the beginning of the tax filing season if you purchased health care insurance through the Marketplace.
If your Form 1095-A is incorrect, you should contact the state or federal Marketplace from which you received coverage. The Marketplace may need to send you a corrected Form 1095-A.
If you chose to have advance payments of the premium tax credit paid directly to your insurance company, you must complete Form 8962, Premium Tax Credit, and file a federal income tax return, even if you are otherwise not required to file.
Form 8962 is used to reconcile the advance payments of the premium tax credit with the amount you qualify for based on your final income. If you used too much, you’ll repay it via taxes. If you used too little, claim the difference as a credit.
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