If you purchased a health plan through the Health Insurance Marketplace you can expect to receive a Form 1095-A Health Insurance Marketplace Statement by January 31, 2015. Many have decided to take a premium tax credit in advance that helps subsidize their monthly health insurance premiums. The credit you receive will be reported on 1095-A, and you are required to report this information on Form 8962 (Premium Tax Credit). This form is required to be filed along with your 2014 tax return.
There are three steps to figure out your premium tax credit amount:
- You will have to figure out the actual amount of credit you received in relation to your yearly income and family size.
- You enter the amount of the advance tax credit you received each month in 2014.
- Subtract the credit amount that you received in advance from the actual amount of your credit.
Once you completed the three above steps you will have an outcome of either being entitled to a refund if your credit is greater than the total advance credit you received. If you received a larger advance credit then you qualified for you will owe more tax at the end of the year to pay for the overpayment via the advance credit.