Andrew enrolls himself and his three dependents, Terri, Phil, and Anne in a qualified health plan. No one in Andrew’s family is eligible for MEC (other than Marketplace coverage) and the applicable SLCSP premium that would apply to all four members of Andrew’s family is $1,200. There are no changes involving the lawfully present members of the coverage family during the year. The monthly enrollment premiums for Andrew and his other two dependents are $800 and the applicable SLCSP premium that applies to Andrew’s coverage family of three is $900. The Marketplace reports the following amounts on Form 1095-A, Part III.
Nonresident Alien Taxes: Ultimate Filing Guide
Taxpayers should consult the IRS instructions for Form 8962 to ensure compliance. Part premium tax credit, form 8962 V is only for couples who got married in the tax year for which they’re filling out Form 8962. If this is you, consult the directions to figure out whether you need to fill out this section. The chart (Table 4) in the form instructions will help you determine whether you are eligible for the alternative calculation. The PTC begins phasing out for those earning 100% to 400% of the federal poverty line. However, the income limits are higher if you live in Hawaii or Alaska.
Rental Income Tax: How Is Rental Income Taxed
During the year, Catelyn lost her job and her household income for 2024 is 130% of the federal poverty line (within the Medicaid income threshold). For purposes of the PTC, Catelyn is treated as ineligible for Medicaid for 2024. In general, you cannot get the PTC for your coverage in a qualified health plan if you are eligible for government-sponsored MEC.
Q5. Who is eligible for the Premium Tax Credit? (updated Feb. 9,
She uses the total PTC shown on line 24 ($6,534) to figure the self-employed health insurance deduction in Step 3, later. Enter the Step 2 PTC that is allocable to the specified premiums you entered on line 1 for the separate trade or business. You can allocate the Step 2 PTC using any reasonable method.
Estimated Tax Payment Calculator: Manage Your Quarterly Taxes
The instructions in this section apply to you if you claim any of the following deductions or exclusions. Enter the amount from the Step 3 Worksheet for the same separate trade or business for which you are completing the Step 5 Worksheet. Use Worksheet P to figure the amount you can deduct for nonspecified premiums. The following example describes the alternative calculation for year of marriage for Paulette Oak and Quentin Cedar. Continue to Form 8962, line 24, and complete the rest of the form. Complete Form 8962, lines 35 and 36, using the following instructions.
Income Tax Extensions: Common Misconceptions
- 974 until you have completed Table 4 to determine whether you meet the requirements to elect the alternative calculation.
- If you do not have a reference month for the applicable SLCSP premium, you must look up the SLCSP premium that applies to your coverage family (without any not lawfully present family members).
- For information about how to fill out this form, see the Instructions for Form 8962.
- If you checked “No” on line 10 and you are completing lines 12 through 23, do not complete line 11.
- If you are not enrolled in a plan, the employer must provide you with the SBCs for all plans in which you can enroll.
To be eligible to make this election, you must meet either of the following conditions. Complete Part IV using the rules in this section if you need to allocate policy amounts and Allocation Situations 1 through 3 do not apply. If you are self-employed and are claiming the self-employed health insurance deduction, see Self-Employed Health Insurance Deduction and PTC in Pub. If you did not complete Part V, enter on lines 12 through 23, column (c), your monthly contribution amount from line 8b.
Reconciliation of Advance Credits
Kevin and Nancy are married at the end of 2024 and have no dependents. Kevin and Nancy are enrolled in a qualified health plan for 2024 with an annual premium of $10,000 and APTC of $6,500. According to Table 3, Kevin and Nancy follow the rules under Allocation Situation 2, earlier. Nancy is a victim of domestic abuse and is unable to file a joint return under the rules outlined in Exception 2 under Married taxpayers, earlier.
Step 5: Submit Your Tax Return
- Use this section if you meet either of the following conditions and no other allocations for the policy are necessary.
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- If Alice is eligible for the PTC, she will take into account $2,600 ($13,000 x 0.20) of the enrollment premiums for Jane and $2,400 ($12,000 x 0.20) of the applicable SLCSP premiums.
- David leaves Form 8962, lines 21 through 23, blank because he was not enrolled in a qualified health plan during October through December.
- As a result, you might face different circumstances at the end of the year, meaning you might have credit left over or you might need to repay some of your credit.
- If you cannot get benefits under an employer-sponsored plan until after a waiting period has expired, you are not treated as eligible for that coverage during the waiting period.
974 for information on determining the correct premium for the applicable SLCSP or, if you enrolled through the federally facilitated Marketplace, go to HealthCare.gov/Tax-Tool/. Ryan enters the monthly amounts allocated to him on Form 8962, lines 12 through 15, column (f) ($500 for January through April), and the total of $2,000 on lines 25 and 27. Ryan enters the amount from line 29 on the applicable line of his tax return. If you completed Part IV for any Form 1095-A, add the monthly premium amounts allocated to you, if any, using the allocation percentage you entered on Form 8962, lines 30 through 33, column (e), to the monthly premiums for other policies that you did not allocate. You may need to allocate policy amounts under a qualified health plan using different rules for different months if you had a change in circumstances. Use Table 3 to determine which allocation rule to use for each month.
In certain circumstances, reporting entities aren’t required to send tax forms to covered individuals showing proof of MEC (Forms 1095-B and 1095-C) unless a form is requested. If requested by the individual, the form must be provided by January 31 or 30 days after the date of request, whichever is later. Once you complete Form 8962, you transfer the results to your Form 1040. The outcome dictates where the information is reported and whether it increases your refund or the tax you owe. The form checks whether your income stayed within the range you estimated when applying for health insurance. Understanding Form 8962 and PTC eligibility ensures you maximize benefits while avoiding tax issues.
He and his two children were enrolled in a qualified health plan from January 1 through July 31. The Marketplace sent him a Form 1095-A (not illustrated) showing his enrollment information for this 7-month period. She was enrolled in a qualified health plan from January 1 through July 31. The Marketplace sent her a Form 1095-A (not illustrated) showing her enrollment information for this 7-month period. You may include an individual who qualifies as the dependent of both you and your spouse in either alternative family size. Pat, Jamie, and Andy each complete a worksheet as shown below and use it to complete Part IV.