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

Affordable Care Act

Calculating the Premium Tax Credit

Changes During the Year

A taxpayer's premium tax credit for the year will differ from the advance credit payment amount estimated by the Marketplace if the taxpayer's family size or household income as estimated at the time of enrollment are different from the family size or household income reported on the return.

The more the family size or household income differs from the Marketplace estimates used to compute the advance credit payments, the more significant the difference will be between the advance credit payments and the actual credit.

If notified, the Marketplace will update the information used to determine the expected amount of the premium tax credit and adjust the advance credit payment amount. This adjustment decreases the likelihood of a significant difference between the advance credit payments and the actual premium tax credit. Changes in circumstances that can affect the amount of the premium tax credit include:

  • Increases or decreases in household income
  • Marriage
  • Divorce
  • Birth or adoption of a child
  • Other changes in household composition
  • Gaining or losing eligibility for government-sponsored or employer-sponsored health care coverage
  • Change of address