How to Determine if You Can Claim the Premium Tax Credit

IRS Health Care Tax Tip 2016-15, February 4, 2016

The premium tax credit is a credit for certain people who enroll, or whose family member enrolls, in a qualified health plan offered through a Marketplace. Claiming the premium tax credit may increase your refund or lower the amount of tax that you would otherwise owe.

If you did not get advance credit payments in 2015, you can claim the full benefit of the premium tax credit that you are allowed when you file your tax return. You must file Form 8962 to claim the PTC on your tax return.

You can take the PTC for 2015 if you meet all of these conditions.

For at least one month of the year, all of the following were true:

• An individual in your tax family was enrolled in a qualified health plan offered through the Marketplace.
• The individual was not eligible for minimum essential coverage, other than coverage in the individual market.
• The portion of the enrollment premiums for the month for which you are responsible was paid by the due date of your tax return.

To be an applicable taxpayer, you must meet all of the following requirements:

• For 2015, your household income is at least 100 percent but no more than 400 percent of the Federal poverty line for your family size.
• No one can claim you as a dependent on a tax return for 2015.
• If you were married at the end of 2015, you must generally file a joint return. However, filing a separate return from your spouse will not disqualify you from being an applicable taxpayer if you meet certain requirements.

Individuals can use the Premium Tax Credit Flow Chart to determine if they are eligible for the credit. Answer the yes-or-no questions in the chart – or via the accessible text – and follow the arrows to find out if you may be eligible for the premium tax credit. You can also use our interactive tool, Am I eligible to claim the Premium Tax Credit? to find out if you are eligible.

For more information about eligibility requirements see Eligibility for the Premium Tax Credit and also the instructions for Form 8962, Premium Tax Credit on IRS.gov/aca.

If you received the benefit of advance credit payments in 2015, you must file a tax return to reconcile the amount of advance credit payments made on your behalf with the amount of your actual premium tax credit. You must file an income tax return for this purpose even if you are otherwise not required to file a return. You’ll file Form 8962, Premium Tax Credit, with your tax return to reconcile the credit.

Remember, that filing electronically is the easiest way to file a complete and accurate tax return as the software does the math and guides you through the filing process. Electronic filing options include: free Volunteer Assistance, IRS Free File, commercial software, and professional assistance.