If you purchase health insurance coverage through the Health Insurance Marketplace, you may be eligible for savings on your monthly premium in the form of a tax credit. This tax credit can help make purchasing health insurance coverage more affordable for individuals and families who have a moderate income.
Am I eligible for a tax credit?
You may be eligible for a health insurance tax credit if you meet the following criteria:
- You purchased health insurance through the Health Insurance Marketplace.
- You do not qualify for coverage through an employer or government plan.
- Your household income is less than 400 percent of the Federal Poverty Level. (This figure is currently $46,680 for individuals and $95,400 for a family of four.)
- You do not file a Married Filing Separately tax return (unless you meet criteria allowing certain victims of domestic abuse and spousal abandonment to claim the premium tax credit using the Married Filing Separately filing status).
- You are not reported as a dependent on another person's tax return.
Click here to find out if you are eligible for savings on the cost of health insurance.
How do I claim the tax credit?
If you are eligible to receive a tax credit on your premium, you can claim it when you file your tax return. To claim the tax credit, you must complete IRS Form 8962 and file it with your federal income tax return.
If you are eligible to receive a tax credit, you can choose to:
Receive it now: You can have some or all of the estimated credit paid in advance directly to your insurance company. This will lower the amount you spend on your premium.
Receive it later: You can wait and get all of the credit at once when you file your tax return.
How much will I receive?
When you enroll in a health insurance plan, the Health Insurance Marketplace will use the information you provide about projected income and family composition for the year to estimate the amount of the credit you can claim on your tax return. You can then decide whether to have all, some or none of the estimated tax credit paid in advance to your insurance company.
Tax credits are based on income, and monthly premiums are capped between 2 and 9.5 percent of an individual's total household Modified Adjusted Gross Income, per household member. The less an individual or a family earns, the bigger the tax credit they will receive.
