Use the Premium Tax Credit Change Estimator tool
Use the Premium Tax Credit Change Estimator tool to estimate how your PTC will change if your income or family size changes
If you, or your spouse or a dependent, purchased health coverage through the Health Insurance Marketplace and paid advance payments of the premium tax credit for the insurance company’ coverage, it is important that you report changes in circumstances, such as changes in your income or family size, when they happen to your Marketplace.
Advance payments are based on an estimate of the premium tax credit that you will claim on your federal income tax return. The Marketplace estimates the credit by using information about your family composition, projected household income, address, and who in your family is eligible for coverage through an employer or the government that you provided when you applied for coverage. When you file your tax return, you’ll reconcile the advance credit payments with the amount of credit you are allowed.
Certain life occurrences, like having a child or losing a job, can directly affect the premium tax credit you are entitled to. In addition to reporting changes to the Marketplace, you can use the Taxpayer Advocate’s Premium Tax Credit Change Estimator to estimate how your premium tax credit will change if your income or family size changes during the year before you even file that tax return.
For example, if you get a new job with a higher salary, you should notify the Marketplace of the change in income. Otherwise, it is likely that your premium tax credit will be less than your advance credit payments, which will result in additional tax liability to you when you file your return.
This tool can help you anticipate changes in the final credit amount and plan for the result.
Changes in circumstances that you should report to the Marketplace include:
- An increase or decrease in your income, including lump sum payment distributions
- Marriage or divorce
- The birth or adoption of a child
- Starting a job with health insurance
- Gaining or losing your eligibility for other health care coverage
- Changing your residence
For the full list of changes you should report, visit Healthcare.gov.
The tool can estimate most of the life changes listed above, but cannot estimate changes due to marriage or a geographic move to another ZIP code. The tool won’t report the changes you enter into the estimator to the Insurance Marketplace where you purchased your healthcare coverage — you will need to do that.
Using the Premium Tax Credit Change Estimator to estimate potential changes to the premium tax credit amount after any life change gives you a better idea of how much an expected refund amount or balance due may change at tax time. It can help you preplan possible finance options throughout the remainder of the year.
The Premium Tax Credit Change Estimator is available any time, night or day. Give it a try.
Aren’t sure if you even qualify for the Premium Tax Credit? No problem, there is also an online tool to help you determine if you are eligible for this credit. Use the Am I eligible to claim the Premium Tax Credit? Interactive Tax Assistant tool on IRS.gov