File Now – Don’t Risk Losing an Advance Premium Tax Credit

March 23, 2016 : Teresa Shipley Feldhausen

Did you know that a lot of people who need to file tax returns never do? Last tax season, that amounted to roughly 7.5 million Americans.

One very important reason to file is to stay eligible for the Advance Premium Tax Credit, or APTC, when you apply for health insurance through the Marketplace. The APTC is a payment that helps you afford your monthly health insurance premium. It’s based on your income.

If you received an APTC in 2015, you need to file federal income taxes in order to stay eligible for the APTC going forward.

What if I don’t owe regular income taxes? Do I still have to file?

Yes; if you had health insurance coverage through a Marketplace plan in 2015, you are required to file a return and reconcile any advance PTC you received. If you do not file a return, you may be denied advance premium tax credits during the next open enrollment period, which will begin in the fall of 2016.

Even if you did not choose to receive advance payments, you must file a federal income tax return to claim the PTC.

How does this apply to me?

You will need to file a federal tax return if:

  • An Advance Premium Tax Credit was paid to you or to another individual in your “tax family” in 2015. Your tax family includes anyone claimed on your tax return for 2015.
  • An Advance Premium Tax Credit was paid for someone you told the Marketplace you would claim as a dependent and neither you nor anyone else claimed that individual’s exemption. (Need more info on personal exemptions and dependency? This article has some tips.)

What about these 1095s? What are they?

The 1095 forms report information about your health insurance coverage over the last year. There are three different versions, depending on what type of coverage you had: A, B and C

If you received form B or C, you do not need to use them to file your taxes. The only people who need to use a 1095 form to file their taxes are those who receive form 1095-A.

Form 1095-A, Health Insurance Marketplace Statement is mailed to those who purchased health coverage through a state or federal Marketplace in 2015. The form was mailed out to recipients by mid-February, and it’ll also appear online in your Marketplace account.

If you received advance PTC, you’ll need the 1095-A to file your 2015 federal income tax return and figure out your actual 2015 premium tax credit, if you qualify for one. (Again, for those people who received health insurance from their employer and who receive 1095 Bs or Cs, you do not need to use those forms to file your taxes.)

Learn more about 1095s.

What if I haven’t filed my 2014 return yet?

Don’t continue to wait around. The Tax Institute at H&R Block has estimated that there could be more than 1 million taxpayers who received an Advance Premium Tax Credit during 2014 and still haven’t filed a 2014 tax return. If you are one of those people, an H&R Block tax professional can certainly help navigate this tricky situation and make sure you continue to receive the advance premium tax credit.

What if I haven’t filed my 2015 return yet?

It’s not too late, but don’t continue to wait around. Our best advice is to either file a return and reconcile your credit by April 18, or request an extension so you have more time to file your taxes. An extension will give you until October 17 to file your return and reconcile any credit you received through the Marketplace.

Make an appointment with one of our tax professionals or prepare your return online so you can stay in compliance.

More questions?

Taxes are complicated. We’ll make sure you’ve got it right.

If you are still stumped by your 1095-A form, or got an incorrect 1095-A, we have some advice for you.

If you still need health insurance in 2016, you may qualify for a special enrollment period.

Finally, if you’ve been putting off filing because you didn’t have any health insurance in 2015 and are afraid of a penalty, you may want to determine if you are eligible for one of 30 possible exemptions.

If you still have questions, get more help from our ACA Tax Impact resource.

For information on these and many other topics on health care and taxes, visit our ACA blog.

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Teresa Shipley Feldhausen

Guest Contributor

Teresa is a health and science reporter living in Washington, D.C. She has been a researcher for National Geographic Magazine, a writer and blogger for the Student Conservation Association and a reporter for Idaho newspapers.