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Health Insurance Premium Tax Credit

Posted by: Zaher Fallahi
Posted On: Oct 24, 2013

Starting in 2014, individuals and families can take a new premium tax credit to help them afford health insurance coverage purchased through an Affordable Insurance Exchange. The premium tax credit is refundable so taxpayers who have little or no income tax liability can still benefit. The credit also can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums. On May 18, 2012, the Department of the Treasury and the IRS issued final regulations which provide guidance for individuals who enroll in qualified health plans through Exchanges and claim the premium tax credit, and for Exchanges that make qualified health plans available to individuals and employers. On Jan. 30, 2013, the Department of the Treasury and IRS released final regulations on the premium tax credit affordability test for related individuals. On April 30, 2013, the Department of the Treasury and the IRS issued proposed regulations relating to minimum value of eligible employer-sponsored plans and other rules regarding the premium tax credit. The proposed regulations solicit public comments. Additionally, Notice 2013-41, issued on June 26, 2013, provides information for determining whether or when individuals are considered eligible for coverage under certain Medicaid, Medicare, CHIP, TRICARE, student health or state high risk pool programs. This determination will affect whether the individual is eligible for the premium tax credit. Comments may be submitted electronically, mailed or hand delivered to the IRS. On June 28, 2013, the Department of the Treasury and IRS issued proposed regulations on the new reporting requirements for Exchanges. Comments may be submitted electronically, mailed or hand delivered to the IRS. For more information on the credit, see our questions and answers.