Tips about the Premium Tax Credit

Tuesday, January 5, 2016

For those of you who don’t know, the premium tax credit helps taxpayers in lower income ranges to afford healthcare insurance when it is purchased through a Health Insurance Marketplace. However, to get to use the premium tax credit, a taxpayer needs to meet eligibility requirements based on their tax return.  

Tax experts reveal some tips that the IRS want taxpayers to know about the premium tax credit. 

First off, there is a question about household income and this is important for the IRS to get an accurate picture of your (and your spouse’s) adjusted gross income whether you file an individual or joint tax return.  In addition, each person you claim as a dependent is also important to determine if you qualify for the tax credit. If you have questions about the tax credit relating to your spouse or dependents, you can contact the IRS at IRS.gov/aca.

The IRS may also be interested in your Form 1095-A in order to verify the information on your tax return.  If you need to get a copy of this form, you can request one at https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Health-Insurance-Marketplace-Statements

If you received advance payments of the premium tax credit, you will still need to file a tax return in order to settle how much you received in advance and compare it to the amount you should receive with the premium tax credit.  You will need to provide the IRS with Form 8962 whether or not you need to file a tax return.

If you have an issue with filing your taxes before the due date, you may receive a letter from the IRS to let you know you may not have filed a tax return. Simply follow what the IRS suggests in the letter based on the instructions. Don’t forget to complete any information needed on your Marketplace application by December 15, 2015. If you happen to miss this deadline, you may end up paying the full costs of your health care insurance Marketplace plan and covered services.

Any taxpayer that needs assistance with filing a tax return and reconciling can file electronically.  This happens to be the safest, most accurate and easiest way to file your tax return. 

The Strategic Tax Lawyers, LLP are a firm of professional and qualified California Tax Attorneys, Intent to Levy attorney and Tax Relief attorneys who specialize in all aspects of the tax code, especially federal tax liens.  Our firm has years of experience dealing with the IRS about tax-related issues.  To get a free consultation, call the Strategic Tax Lawyers at (800) 669-4775 for assistance you with your tax-related matters.