What is the Advance Premium Tax Credit?
The APTC is a government subsidy that reduces the monthly cost of health insurance for eligible individuals introduced by the Affordable Care Act.
How Does APTC Work?
When a taxpayer applies for health insurance in the Marketplace, they provide an estimate of their expected earnings. Based on this, the Marketplace calculates their eligible credits.
What happens if income is higher than expected?
If actual income is higher than estimated, the taxpayer may have received too much APTC and will be required to pay back some or all when they file.
What if income is lower than expected?
In this case the taxpayer might not have used the full credit available and a refund will be issued, or applied towards any taxes owed.