http://derlandbahrcpa.com/premium-assistance-tax-credit/ Many estimated a "premium assistance tax credit" back in 2012. That information will be reconciled on your 2014 income tax return. This presentation explains more about how it all works.
2. For those who purchased insurance through a
state exchange or through Healthcare.gov,
many received some sort of premium
assistance which may have ranged from less
than $100 per month up to $200 or $300 or
more each month in order to help them buy
health insurance.
This does not include those who have
insurance through their work or through
Medicaid.
3. When you signed up for insurance, you had
the option whether to receive an advanced
credit on a monthly basis and thus reduce your
monthly payments on health insurance or to
wait and receive it all at the end of the year
when you file your tax return.
Many chose to receive the money ahead of
time.
4. For most people who signed up, their income
level was determined based upon their 2012 tax
return and other information they provided.
This was used to help determine what their
2014 AGI would be and to help determine the
amount of credit that they qualified for.
However, and this is key, your actual credit is
dependent upon your 2014 AGI when you file
your 2014 return in early 2015.
5. If you received an advanced premium credit to
reduce monthly insurance premiums
throughout 2014, you will have to reconcile the
amounts you actually received with the
amounts your should have received based
upon your 2014 tax return.
6. If your income was higher than you
anticipated, you will likely have to pay some of
the advanced credit back.
If your income was lower than you projected
when you applied for health care on
healthcare.gov, you will probably receive an
additional credit and thus get a larger refund
(or owe less tax).
7. The advanced premium credit that you
received on a monthly basis was an estimate.
And it was based on 2012 information and
other information you provided when you
signed up for health insurance.
8. The estimate is only as accurate as the
information you provided to the exchange.
Your actual credit will be determined when
you file your 2014 return, and some may have
to repay some of the credit while others may
get more.
9. For more information, please contact Derland
Bahr CPA – 254-432-5724 or visit
DerlandBahrCPA.com.