These subsidies are sent directly to your health insurance company and offset thepremium amountyou have to pay each month.
As of 2024, more than nine out of 10 Marketplace enrollees nationwide were receiving premium subsidies.
Also note that “Marketplace” and “exchange” are used interchangeably as well.
Pattanaphong Khuankaew / EyeEm / Getty Images
Actual vs. Income is calculated asan ACA-specific version of modified adjusted gross income.
If the estimate matches what you actually make, you wont have a problem.
This decreases the monthly premium you pay for health insurance.
If those two amounts are different, you will reconcile them when you file your taxes.
No harm; no foul.
The difference will be added to your tax refund or will decrease the amount of taxes you owe.
But you also won’t get any additional subsidy when you file your taxes.
Youll have to reconcile that bypaying back some or all of the excesswhen you file your taxes.
If the amount you have to repay is $15, it probably isnt that big of a deal.
Cap for Subsidy Repayment
Form 8962is used to reconcile premium tax credits.
Through 2025, these households can still be eligible for subsidiesin some circumstances, very large subsidies.
But there is no limit on how much they do have to repay.
(Note that the prior year’s poverty level numbers are used to determine subsidy eligibility.
So for 2023 coverage, the 2022 poverty level numbers were used.)
How Much APTC Repayment Do People Owe?
The IRS paid nearly $3.5 billionan average of about $834 per returnto these filers.
Centers for Medicare and Medicaid Services.2024 Marketplace Open Enrollment Period Public Use Files.
Accessed May 17, 2024.
Internal Revenue Service.Premium tax credit: claiming the credit and reconciling advance credit payments.
healthinsurance.org.If my income is less than expected this year, I might be eligible for Medicaid.
What can I do to cover my bases?September 2022.
April 17, 2018.
Healthcare.gov.Advance premium tax credit (APTC).
Internal Revenue Service.Premium Tax Credit - The Basics.
Internal Revenue Service.2021 Instructions for Form 8962.
Internal Revenue Service.Instructions for Form 8962, Table 5.
UC Berkeley Labor Center.Modified adjusted gross income under the affordable care act.
healthinsurance.org.With my income, Im barely over the eligibility limit for a premium subsidy.
Is there anything I can do to lower my income so I become eligible?May 10, 2020.
Internal Revenue Service.Table 1.
