HEALTH CAREPREMIUM ASSISTANCE

and2014 Tax Returns

Advanced Premium Credits

For those who purchased insurance through a state exchange or through Healthcare.gov, many received some sort of premium assistance which may have ranged from less than $100 per month up to $200 or $300 or more each month in order to help them buy health insurance.

This does not include those who have insurance through their work or through Medicaid.

Advanced Premium Credits(Continued)

When you signed up for insurance, you had the option whether to receive an advanced credit on a monthly basis and thus reduce your monthly payments on health insurance or to wait and receive it all at the end of the year when you file your tax return.

Many chose to receive the money ahead of time.

What you may not have realized . . .

For most people who signed up, their income level was determined based upon their 2012 tax return and other information they provided. This was used to help determine what their 2014 AGI would be and to help determine the amount of credit that they qualified for.

However, and this is key, your actual credit is dependent upon your 2014 AGI when you file your 2014 return in early 2015.

If you received an advanced premium credit . . .

If you received an advanced premium credit to reduce monthly insurance premiums throughout 2014, you will have to reconcile the amounts you actually received with the amounts your should have received based upon your 2014 tax return.

What this means . . .

If your income was higher than you anticipated, you will likely have to pay some of the advanced credit back.

If your income was lower than you projected when you applied for health care on healthcare.gov, you will probably receive an additional credit and thus get a larger refund (or owe less tax).

Summary

The advanced premium credit that you received on a monthly basis was an estimate.

And it was based on 2012 information and other information you provided when you signed up for health insurance.

Summary(Continued)

The estimate is only as accurate as the information you provided to the exchange.

Your actual credit will be determined when you file your 2014 return, and some may have to repay some of the credit while others may get more.

If you need more info . . .

For more information, please contact Derland Bahr CPA – 254-432-5724 or visit DerlandBahrCPA.com.