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Mid-Year Premium Tax Credit Checkup

Taxpayers who have insurance through the Health Insurance Marketplace, may be receiving advance payments of the premium tax credit.  The credits are paid directly to the taxpayer’s insurance company to lower their monthly premium.  Changes in income or family size may affect the premium tax credit.  If a taxpayer’s circumstances have changed, the time is right for a mid-year check-up to see if they need to adjust the premium assistance they are receiving.  Taxpayers should report changes to the marketplace that have occurred since they signed up for their health insurance plan to their Marketplace as they occur.

Changes in circumstances that should be reported to the Marketplace include, but are not limited to:

An increase or decrease in income

Marriage or divorce

The birth or adoption of a child

Starting a job with health insurance

Gaining or losing eligibility for other health care coverage

Change of residence

Reporting the changes will help taxpayers avoid receiving too much or too little advance payment of the premium tax credit.  Getting too much means they may owe additional money or get a smaller refund when they file their taxes.  Receiving too little could mean missing out on premium assistance to reduce their monthly premiums.


Repayments of excess premium assistance may be limited to an amount between $400 and $2,500 depending on a taxpayer’s income and filing status.  However, if advance payment of the premium tax credit was made but their income for the year turns out to be too high to receive the premium tax credit, they will have to repay all of the payments that were made on their behalf, with no limitation.  Therefore, it is important that they report changes in circumstances that may have occurred since they signed up for their plan.


Changes in circumstances also may qualify taxpayers for a special enrollment period to change or get insurance through the Marketplace.  In most cases, if they qualify for the special enrollment period, they will have sixty days to enroll following the change in circumstances.  You can find information about special enrollment at www.HealthCare.gov


Find out more about the premium tax credit and other tax-related provisions of the health care law at IRS.gov/aca.


Updated on July 16, 2018

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