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I got health insurance last year through a Marketplace plan and also received advanced premium tax credits to reduce my monthly premium. What happens if I don’t file my federal income tax return this spring? What if I file but don’t include Form 8962?

For any year when you received advanced premium tax credits, you are required to file a federal income tax return, including Form 8962.  If you fail to do this — it is called “failure to reconcile” — you may be unable to apply for premium tax credits for the following year.  If you file a federal income tax return but don’t include Form 8962, that is also considered a failure to reconcile and you may be prevented from applying for premium tax credits at the next Open Enrollment.
If this happens to you, be sure to remedy this failure as soon as you can.  You can still sign up for health insurance coverage for the coming year, but you won’t be able to get advance premium tax credits until you have filed your prior-year tax return with Form 8962.

I got a premium tax credit in 2017, but I usually don’t file a tax return and didn’t realize I was supposed to file a 2017 return this year. Now I’m trying to renew my premium tax credit for next year and the Marketplace says I can’t. What do I do now?

You should file your federal income tax return for 2017 as soon as possible.  Then log into your Marketplace account, update your application information, and tell the Marketplace that you have filed your taxes by attesting to that question on the application.  Keep in mind that the Marketplace will check with the IRS during the coverage year to verify your return was filed and, if it cannot verify, will terminate your premium tax credit.

I never filed an income tax return before. Can I claim a premium tax credit this year?

Yes in most cases. People who have not filed a tax return before can qualify for a premium tax credit. However, there is a requirement to file a return for the tax year in which you receive a premium tax credit.  If you got an advanced premium tax credit last year, you must file a federal income tax return for that year to be eligible to receive an advance premium tax credit next year.

How often during the year can I adjust my premium tax credit amount? What documentation is required to make an adjustment? How long after I request the adjustment will it take effect?

There is no limit to the number of times a person may report income, family or insurance-eligibility changes to the Marketplace. Changes that are reported by enrollees will be verified by the Marketplace. Then the Marketplace will send you a notice (called a redetermination notice) showing your revised eligibility for premium tax credits and cost-sharing reductions. In addition, people can always ask the Marketplace to provide them with a monthly advance premium credit below the amount the Marketplace determines based on the household’s income if they want to minimize the chance of needing to owe money at the end of the year.

The adjustment will take effect by the first day of the month following the date of the redetermination notice. For example, if an enrollee reports a change in income on June 25 and the Marketplace verifies the change and sends a redetermination notice to the enrollee on July 3, the change will be implemented on August 1.

I understand eligibility for premium tax credits is based on our household income. Who counts as being in my household?

A household, for purposes of determining eligibility for premium tax credits, includes any individuals whom you list on the federal tax form. That includes yourself, your spouse, and dependents. Dependents include children who meet certain requirements:

  • U.S. citizen or resident of the U.S, Mexico or Canada
  • Live with you for more than half the year
  • Under age 19 at the end of the year (or under age 24 if a full-time student); a child is considered to live with the taxpayer while he or she is temporarily away from home due to education, illness, business, vacation or military service.
  • Doesn’t provide more than 50% of his or her own support

Other adults who can count as dependents include relatives, in-laws or full-time members of your household who:

  • Are a U.S. citizen or resident of the U.S, Mexico or Canada
  • Receive more than 50% of their support from you
  • Are related to you or live in your home all year
  • Make less than $4,150 (in 2018), generally excluding Social Security

A household can include individuals even if they are ineligible for tax credits (for example, individuals who are not lawfully present). Your household size can change during a year due to family changes, including the birth or adoption of a child, a child moving out of the house, and divorce or legal separation. When such changes take place you should report them to the Marketplace as they may affect your eligibility for subsidies. Family changes also can trigger a special enrollment opportunity when you can change health plans, even outside of the regular Open Enrollment period.

Note that the definition of household for determining eligibility for premium tax credits sometimes differs from the definition of household for determining Medicaid eligibility. Ask your Marketplace for more information about who should be counted in your household.

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