Advance Premium Tax Credit (APTC) and your tax return reconciliation

Advance Premium Tax Credit (APTC) and your tax return reconciliation 2018-04-04T10:32:17+00:00

IMPORTANT

If you received Advance Premium Tax Credit to lower your monthly premium payments at any time in 2017, you must file your 2017 taxes or you may not get APTC, including ConnectorCare, in 2019.

If you received APTC (including ConnectorCare) to lower your monthly health insurance premium costs in 2017 and you do not file a 2017 tax return, you will not be eligible for advance payments of the premium tax credit or ConnectorCare to help pay for your health insurance coverage in 2018. This means you will be responsible for the full cost of your monthly premiums and all covered services. In addition, the IRS may contact you to pay back some or all of the 2017 advance payments of the Premium Tax Credit.

If you purchased insurance through the Health Connector in 2017, you may have been eligible for a Premium Tax Credit to help you pay for your health insurance premiums. (IRS Form 8962 will help you figure out if you were eligible.)

When you enrolled for your health coverage, you may have chosen to:

  1. Get the money from the Premium Tax Credit during the year.
    If so, an amount was sent directly to your health insurance company, lowering your monthly premium cost. The amount is also known as an advance on the Premium Tax Credit, or Advance Premium Tax Credit.
    OR
  2. Get the money with your tax return.
    You may get additional money when you file your return through the Premium Tax Credit.

Regardless of which choice you made, Form 8962 will be used to figure out how much of the credit you will get or even may have to pay back.

 

When would you have to pay some of tax credit back when you file your tax return?

If you received APTC to lower your monthly premium costs, that means you gave the Health Connector your best estimate of what your 2017 income would be when you signed up. (For many people, this could have been based on their 2016 income if they expected their income to be steady.) The APTC you qualified for in 2017 was based on that estimate.

If your income for 2017 was more than your estimated income, you may have to pay back some or all of the money that lowered your monthly payments.

When would you get more money back when you file your tax return?

If you received APTC to lower your monthly premium costs that means you gave the Health Connector your best estimate of what your 2017 income would be when you signed up. (For many people, this could have been based on their 2016 income if they expected their income to be steady from the past year.)  The APTC you qualified for in 2017 was based on that estimate.

If your income for 2017 was less than your estimated income, you may receive the difference as an extra credit on your tax return.

What if I qualified for APTC when I signed up, but did not use it?

If you chose not to use APTC in 2017 to lower your monthly premium costs, then you will get the credit with your 2017 tax return based on your 2017 income. And it will increase your refund or reduce the amount you owe.

You may also get an extra credit on your tax return if you used less APTC than you were eligible for throughout the year.

At a Glance:

  • If you TOOK MORE advance payments of the premium tax credit than the actual credit you’re eligible for: You may need to pay the difference with your tax return.
  • If you TOOK LESS advance payments of the premium tax credit than the actual credit you’re eligible for: You’ll get the difference as a credit on your tax return.
  • If you DIDN’T TAKE ANY advance payments of the premium tax credit during 2017: When you complete Form 8962 you may find out that you qualify for a credit. If you do, you can claim it when you file your taxes.

For more information about the Premium Tax Credit:

In this section

 

Need help filing your taxes?

Many taxpayers qualify to have their federal and state income taxes prepared and filed for free. Find out where to get free tax filing information on the Massachusetts Department of Revenue website.

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