What Is The Premium Tax Credit (PTC)?
The premium tax credit is a refundable credit available to lower income taxpayers to help them offset the cost of purchasing their health insurance.
Government Insurance Marketplace
It is only available to individuals who purchase their health insurance through a government insurance Marketplace and whose income is between 100 and 400 percent of the federal poverty level. The credit, which is claimed on Form 1040, can also be claimed in advance to reduce current premiums.
If the taxpayer’s advance premium tax credit (APTC) exceeds the PTC, the taxpayer may be required to pay back part of the credit. On the other hand, if the PTC exceeds the APTC, then the excess becomes a refundable credit.
Failure to Pay the Difference
When the advance premium tax credit used as a subsidy payment of the premium is not sufficient to cover the total premium, individuals who fail to pay all or part of the remaining premium amount will be given a mandatory three-month grace period before an involuntary termination of their participation in the plan.
