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Filing Taxes if You Got 2021 Marketplace Premium Credits

by | Mar 3, 2022 | Health Cost, Healthcare

If you were enrolled in a health insurance marketplace plan in 2021 and received tax credits, you must file a 2021 federal income tax return by April 15, 2022. Because filing taxes is confusing, we’ve outlined the steps you need to take and provided some resources to help you file your taxes. But first, we’ll answer a few common questions. 

What are Premium Tax Credits? 

These are tax credits you get to lower the cost of your monthly healthcare premium payment. Most people take that credit in advance, meaning the marketplace uses the money to pay your health plan premium each month. That’s why you pay $0 or very little each month to your health plan. Some people choose to pay the total monthly premium costs themselves to get a refund on their taxes at the end of the year. 

Do I Qualify for Premium Tax Credits? 

You are eligible for premium tax credits if your household income is between 100% – 400% of the federal poverty level. The exact amount of tax credit you get depends on your income and the number of people you claim on as dependents.

Why do I have to File Taxes if I get Premium Tax Credits?

Yes. Here’s why. When you enrolled in a health plan, you got credits based on the income you expected to earn in 2021. When you file your 2021 taxes, you will use the income you actually earned. 

  • If you earned less than you thought you would, you can claim a credit on your tax return. 
  • If you earned more than you expected, you may have to repay some of it. 

If you do not file taxes, you could lose your eligibility for future premium tax credits. You must file your 2021 tax return by April 15, 2022. 

How to File Your Taxes if You Get Premium Tax Credits

  1. You must file a 2021 federal income tax return by April 15, 2022.

If you get advance premium tax credits or if you plan to claim the premium tax credit, you must file a federal income tax return with the Internal Revenue Service (IRS). Here are links to the most common tax forms:

  1. Use Form 1095-A to fill out your taxes.

You should have received Form 1095-A by early February. It comes from the marketplace, not the IRS. The form has information about your health insurance policy, premiums, tax credits applied, and the people in your household covered by the plan. 

Use the information from this form to complete Form 8962. When finished, keep Form 1095-A with your other tax papers. You do not need to send it with your taxes.  

Can’t Find Form 1095-A? Get in Online
1. Log in to your healthcare.gov account.
2.Under Your Existing Applications, select your 2021 application.  
3.Select Tax Forms from the menu on the left. 
4.Select Download Form 1095-A. 

If American Exchange enrolled you in a marketplace plan, we can get the form for you. Call 1.888.995.1674 or email enroll@americanexchange.com
  1. Complete Form 8962 and Send it with Your Tax Return. 

You must complete and send Form 8962 with your tax return if you got APTC or if you want to take the premium tax credit. Use the tax credit information on Form 1095-A to complete Form 8962. When finished, send the form with your tax return. Keep a copy with your tax records. 

If you don’t file this form, you won’t be eligible for tax credits next year. 

  • If you have taken less premium tax credits than you qualify for, you’ll get the difference back from the IRS.  
  • If you took more premium tax credits in advance than you should have based on your 2021 actual income, you will have to pay back the excess when you file your tax return. 

Can I Get Help Filing My Taxes?

Some states and communities offer free tax filing services. Contact your case manager or state to find out more. Here are a few other programs that offer free or low-cost help:

  • The Volunteer Income Tax Assistance (VITA) program for people with incomes below $58,000
  • The Tax Counseling for the Elderly (TCE) program for people aged 60 or older 
  • The IRS has free tax filing services for people earning less than $73,000

Remember, you must file your 2021 federal income tax return by April 15, 2022 to remain eligible to get health insurance marketplace premium tax credits. 

Need Health Insurance?

American Exchange can help you find the right health insurance marketplace or Medicare health plan that fits your needs. We’ve enrolled more than 60,000 people in affordable plans, including 20,000 in Ryan White program plans. 

Call 1.888.995.1674 or email enroll@americanexchange.com

American Exchange is a licensed health insurance broker. Robert Huffaker, NPN 13568432