Just like you, millions of Americans who purchased a Marketplace plan were eligible for tax credits to offset the costs of health insurance premiums.
The Marketplace used your projected income and family size to estimate your 2014 premium tax credit. You will receive Form 1095-A from the Health Insurance Marketplace, which will have information regarding your insurance coverage like your insurance premium cost, date you were insured, and your advanced premium tax credit.
When you file your 2014 taxes with TurboTax, you will enter the information from the Form 1095-A just like you would a W-2. TurboTax will calculate your actual premium tax credit you’re eligible for based your actual income and family size. If you overestimated your income when you applied for a subsidy, you may see a larger tax credit on your taxes, but if you underestimated you may see a reduced premium tax credit and in turn a lower tax refund or you may owe money back.
The process to determine the premium tax credit depends on several variables (income, family size, marriage status, location, etc). TurboTax makes reporting your actual premium tax credit you’re eligible for easy by doing the calculations for you based on your entries. All ACA related tax forms are included at no extra cost through TurboTax. You can also check out our free tool on TurboTaxHealth.com to estimate your tax credit.
On January 26, the IRS announced that taxpayers who owe money on their 2014 taxes due to excess advanced premium tax credit, will receive penalty relief if they can’t pay the balance owed.
Going forward, in order to receive the most accurate advanced premium tax credit, make sure to notify the Marketplace about changes in circumstances as soon as they happen.
Changes in circumstances that can affect the amount of the actual premium tax credit include:
- Increases or decreases in household income
- Birth or adoption of a child
- Other changes in household composition
- Gaining or losing eligibility for government-sponsored or employer-sponsored health care coverage
- Change of address
If you have more questions about the Affordable Care Act and how it impacts your taxes and finances, TurboTax has you covered. You can go to TurboTax Health and get your questions answered.