IRS redesigning tax notices so they're more intelligible
Don't overlook the EITC, a valuable refundable tax credit that often goes unclaimed

Record ACA enrollment means more premium tax credit claims screenshot January 2024

More than 21 million people selected a medical insurance policy using the Affordable Care Act (ACA) marketplace during the 2024 open enrollment period that ended in mid-January. The numbers should increase, as open enrollment continues in California, New Jersey, New York, Rhode Island, and Washington, D.C., through Jan. 31.

So far, this year's medical coverage enrollees include more than five million people, about a fourth of the 21.3 million total, who are new to ACA. Another 16 million people renewed their coverage to the plans, also still referred to by many as Obamacare.

While the sheer numbers indicate a diverse group of medical plan enrollees, many probably share one thing. They took advantage of the ACA government subsidy, the premium tax credit or PTC.

Tax help paying for health insurance: As a tax credit, the PTC provides a dollar-for-dollar reduction in your tax liability. And since it's a refundable tax credit, it's even better. Any excess PTC you have after offsetting the tax you owe comes back to you as a tax refund. The PTC is available to households with incomes between 100 percent and 400 percent of the federal poverty level (FPL).

The credit helps qualifying ACA enrollees cover some, and in certain instances all, of the cost of policies purchased through the insurance marketplace.

The IRS' online Premium Tax Credit Change Estimator can give you an idea of your expected health care coverage credit. KFF, which was formerly known as The Kaiser Family Foundation and is a nonprofit health policy research organization, also has a Health Insurance Marketplace Calculator that's updated with 2024 plan information.

And, of course, the federal marketplace (and most state marketplaces) will help enrollees find a plan and determine how much premium credit might apply. That way, the PTC is factored in upfront, reducing monthly premiums.

More tax forms, too: Of course, at tax filing time, you'll have to reconcile the advance premium tax credit you got, which is basically an estimate, with your actual tax data you enter on your return. That's done by filing Form 8962, Premium Tax Credit.

To complete Form 8962, you'll need the information on Form 1095-A, Health Insurance Marketplace Statement, which you should receive by the end of the month if it hasn't already arrived.

That's an excerpt of a blank Form 1095-A below. Your copy will have information on the medical insurance policy you purchased and the covered individuals.

Form 1095-A marketplace ACA health insurance coverage

Click here to see the full Form 1095-A, and here to see the form instructions.
See more tax forms and more about them at 
Tax Forms 2024.

Form 1095-A shows the months of coverage purchased through the Marketplace and any advance PTC paid to your insurance company to help cover your monthly premium.

If, based on the Form 1095-A info and your other tax return data, Form 8962 shows your PTC amount is more than the advance you got when you purchased ACA coverage, you get the excess refundable credit dollars to claim against your tax bill. Again, if it's more than you owe, you get it as a tax refund.

But if your final PTC calculation on your tax return shows you got too much credit in advance, you must repay all or part of the excess.

More PTC info: You can find more on the PTC at these pages and publications: The Premium Tax Credit - The BasicsIRS Publication 974, Premium Tax Credit (PTC); IRS Publication 5120, Premium Tax Credit fact sheet; IRS Publication 5195, The Premium Tax Credit and Your Tax Return fact sheet; and Eligibility for the Premium Tax Credit.

Yeah, claiming the PTC is more tax work. But as the latest ACA enrollment figures show, millions of folks are willing to do the extra math — or, in most cases, have their tax software or tax preparer run the numbers — in order to get medical coverage they can, with some tax help, afford.

You also might find these items of interest:



🌟 Search Amazon Health Care 🌟
The text link above is an affiliate ad. If you click through and then buy a product, I receive a commission.



Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)