Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Affordable Care Act

Calculating the Premium Tax Credit

Estimated Amount of Credit

During enrollment, the Marketplace projects income and family composition to estimate the amount of the premium tax credit a taxpayer would be able to claim.

If eligible for the credit, taxpayers may choose to:

  • Have some or all of the estimated credit paid in advance directly to the insurance company to lower what is paid out-of-pocket for monthly premiums during 2014; or
  • Wait to get all the benefit of the credit when they file their 2014 tax return

Taxpayers may have all, some, or none of the estimated credit paid in advance directly to the insurance company. The amount of advance credit payments will appear on Form 1095-A, Health Insurance Marketplace Statement.

Graphic showing Premium Tax Credit cash flowing from Form 1040 tax return to document called Your Health Insurance Premium