The premium tax credit is a tax credit established by the Affordable Care Act. If the discount taken monthly is less than the amount of the credit, you are eligible for a refund. The credit can help make health insurance more affordable to you and your family. The IRS will process tax returns without Form 8962 for tax year 2020 by reducing the excess advance premium tax credit repayment amount to zero." Premium Tax Credit Form 8962. If you get your health insurance coverage through a state or the federal Health Insurance Marketplace you may be eligible. The exchange will make this calculation for you. The Rescue Plan provides immediate tax relief to people who would otherwise need to repay some or all of their premium tax credit because they misjudged their 2020 income. Please note that the refund for the Excess Premium Tax Credit may be issued as a separate refund from the IRS and not included in your original refund. the calculator below has been updated to reflect these latest changes. One of the unintended consequences of the … Taxes, Exemptions, Reconciling Advance Payments of the Premium Tax Credit (APTC) and Failure to File and Reconcile (FTR) Guidance for assisters in the individual Federally-facilitated Marketplaces (FFMs) on APTC reconciliation and the consequences of failing to file a federal income tax return and reconcile APTC. The software determines whether you qualify for a premium … Retroactive changes eliminate repayment of the advance premium tax credit for tax year 2020. getty. Attention: As part of the American Rescue Plan Act or Stimulus Three bill passed in March of 2021, there have been some changes to the Premium Tax Credit confirmed by the IRS on April 9, 2021. Instead of no premium tax credits for individuals and families making more than 400% FPL, the new law will make premium tax credits available to these families and caps how much of a family’s household income the family needs to pay towards their premiums at 8.5%, based on the cost of the benchmark plan. The amount of the advance credit is based on their projected income for the year. IRS Form 8962 Premium Tax Credit is the form to use to claim or reconcile this tax credit. If you claimed an advance payment of the Premium Tax Credit during 2020, you do not have to report an excess of this advance payment on your 2020 return. Of course, using tax preparation software like TaxAct or H&R Block—or a tax accountant will simplify filling out Form 8962. Your premium tax credit (aka premium subsidy) amount is the difference between your expected contribution and the cost of the benchmark plan in your area. The premium tax credit is available to individuals and families with incomes between the federal poverty line and 400 percent of the federal poverty line [1] who purchase coverage in the health insurance marketplace in their state. this new law substantially changes the formula for calculating the premium tax credit in tax years 2021 and 2022. specifically, the new law changes the applicable premium percentages set forth in irc sec. Most enrollees take the credit in advance to defray upfront premium costs. Download the Guidance Document Current law limits eligibility for premium tax credits through the federal and state exchanges to households whose income is from 100% to 400% of the poverty level. 36b(b)(3)(a). Though they seem complicated, IRS instructions are actually quite clear. But since the Premium Tax Credit is meant to help families afford health insurance, you may want to save the money and fill out the form yourself. 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