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

Affordable Care Act

Calculating the Premium Tax Credit

Calculating the Credit (continued)

The monthly contribution amount is the contribution amount divided by 12. Taxpayers enrolled in the same qualified health plan for all 12 months of the year and who have the same applicable SLCSP for all 12 months can do a single, annual calculation to compute their premium tax credit, as in the case study on the next page.

Taxpayers who have a Form 1095-A showing changes in monthly amounts must complete a monthly calculation for the premium tax credit in Section 2 of Form 8962. Taxpayers who have changes in monthly amounts not shown on Form 1095-A (for example, a taxpayer enrolled in a qualified health plan became eligible for employer coverage during the year, but did not notify the Marketplace) must also do a monthly calculation to determine their premium tax credit.

The premium tax credit is a refundable tax credit. If the amount of the credit is more than the amount of the tax liability on the return, taxpayers will receive the difference as a refund. If no tax is owed, taxpayers can get the full amount of the credit as a refund. However, if taxpayers received advance payments of the credit, they will reconcile the advance payments with the amount of the actual premium tax credit that is calculated on the tax return, if advance payments of the premium tax credit were made on behalf of the taxpayer, the taxpayer will reconcile the advance credit payments with the amount of the actual premium tax credit that is calculated on the tax return.

Graphic showing Form 8962 Premium Tax Credit
Form 8962
Form 1095-A

Form 8962

Form 1095-A