Any individual who bought a health care plan through the Health Insurance Marketplace can expect to find a Health Insurance Marketplace Statement, also known as a Form 1095-A, in their mailbox by January 31,2015. Many Americans have chosen to take a premium tax credit in advance, which will help subsidize their monthly premiums. This credit amount will be listed on the Form 1095-A, and will need to be reported on Form 8962 (Premium Tax Credit), in which taxpayers calculate their premium tax credit. This form is to be filed along with the 2014 tax return.
There are three steps to determining your premium tax credit amount:
- First, you have to figure out the actual premium tax credit for the year in relation to your income and family size.
- Enter the advanced tax credit amount received each month through 2014.
- Subtract the credit amount received in advance from the actual allotted credit.
After completing the three steps above, you’ll encounter one of two scenarios as a result. Either you will be entitled to a refundable credit if your actual calculated credit is greater than the total advance credit you received , or you will owe more tax if you received a larger advance credit that you calculated.
