Do you feel like you are unique? Don’t follow the crowd? Go your own way? Well, if you went against your norm and followed the pack and were one of the 7.1 million people who signed up for health insurance by the March 31, 2014 deadline, then keep reading.
If you receive advance payment of the premium tax credit in 2014, it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace.
If you qualified for the premium tax credit, you can either “get it now” as an advance payment or you can “get it later” when you file your tax return.
Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Having at least some of your credit paid in advance directly to your insurance company will reduce the out-of-pocket cost of the health insurance premiums you’ll pay each month.
If you decided to get the credit in advance, it’s important to report any changes in your income or family size to the Marketplace throughout the year. Reporting these changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.
The government makes advance payments of the credit based on an estimate of the credit that you will claim on your tax return when you file in 2015. If you report changes in your income or family size to the Marketplace when they happen in 2014, the advance payments will more closely match the credit amount on your 2014 federal tax return. This will help you avoid getting a smaller refund than you expected or even owing money that you did not expect to owe.
By Donna H. Laubscher, CPA