What is an APTC?
In Idaho, individuals and families enrolled in the Idaho Health Insurance marketplace may be eligible to receive a tax credit to help pay for health insurance premiums. The Federal government pays this tax credit on behalf of the policy holder, a calculated amount each month, to their insurance company. This Advanced Payment Tax Credit is referred to as an APTC. The APTC is calculated by the marketplace when an individual completes an application for coverage that requests help with paying premiums. Household size, ages of members seeking coverage, premium amounts and income are all factors in determining whether the person or family is eligible, and for how much. These applications must be filed on the Your Health Idaho (YHI) website, at yourhealthidaho.org.
Why is it called an “Advanced Payment” tax credit?
This credit is called an “Advanced Payment” because it is paid on behalf of the policy holder each month during the year, but not reconciled until that person or couple files their tax return for that calendar year. This usually occurs by April 15th of the following year. At that point in time, the total tax credit that was paid in advance based on an estimated income is entered into the tax return and compared with the actual income reported. Discrepancies in the income amount between what was estimated and what was reported may affect whether the tax credit is balanced, or if the income reported was higher than estimated, a portion of the tax credit may have to be paid back by the individual. This comparing and matching of the tax credit amount is referred to as Reconciling Your APTC.
How to Reconcile your Tax Credit
In order to reconcile your tax credit, you must use a form 1095-A as part of your tax return filing. From the YHI website: “You’ll receive Form 1095-A: Health Insurance Marketplace Statement from Your Health Idaho. This form is sent to your Your Health Idaho secure inbox and the IRS by January 31. If you opt to receive a print copy, it will also be sent to you via U.S. mail.
Your 1095-A includes information about your health coverage received through Your Health Idaho, including:
- Household members enrolled in a health plan
- How long each household member had health insurance during the year
- The cost of your monthly health insurance premiums
- The amount of Advance Premium Tax Credit (APTC) received each month”
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