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30. How are the amounts of advance premium tax credits reconciled with the amounts due?

See MassLegalHelp for a ConnectorCare overview updated with income, benefit and premium information applicable to 2023 coverage. 

The Health Connector calculates the amount of available advance premium tax credits (APTC) by using information about the individual’s expected income and expected tax household for the calendar year in which the person is enrolled in subsidized coverage. The eligibility notice will identify the maximum amount of the premium tax credit on a monthly basis and the individual can choose whether to take the full amount or a smaller amount in advance. The Health Connector then notifies the IRS how much APTC should be sent directly to the insurance company on the member’s behalf. Electing to take less than the maximum available APTC will increase the amount of the member’s monthly premium contribution. An individual making this choice will be able to collect the full premium tax credit amount when he or she files a federal tax return.

In the following year, the Health Connector sends out federal tax form 1095-A which shows the amount of APTC paid on behalf of the members of the tax household for the prior year. The tax filer needs this form to complete IRS Form 8962 Premium Tax Credit. On form 8962 the tax filer will list his or her actual adjusted gross income as shown on the tax return together with the added nontaxable income counted for MAGI purposes and certain other information about the premium cost of a reference plan (the second lowest cost silver plan) to calculate the amount of Premium Tax Credit he or she was actually due. The tax filer may be due a larger credit than the amount he or she received in advance or the tax filer may have received a larger credit in advance then he or she was due. In the latter case, the individual will have an added tax liability. 

For individuals who received an excess payment, repayment amounts will be in the amount of the excess payment up to a capped amount for those with income not over 400% FPL as shown in the Table below

Cap on Repayment of Excess APTC Based on Income Tax Year 2018
Income as % of FPL Filing status is single Filing status is other than single
<200% $300 $600
>=200%<300% $775 $1550
>=300%<400% $1300 $2600
>400% No cap No cap

Married taxpayers who filed separately based on abuse or abandonment must  check a box on Form 8962 to identify themselves as exempt from the married filing jointly requirement for APTC eligibility. 

If an individual fails to file a federal return for the year in which he or she received an APTC along with Form 8962, the IRS will relay this information to the Health Connector at the time of open enrollment for the following year. An individual who is flagged for “failure to reconcile” will not be eligible for ConnectorCare until he or she files a return along with Form 8982 for the relevant year. (Tax privacy laws limit the information available to the Health Connector, therefore the notice will include failure to reconcile as only one of several possible reasons for loss of subsidy eligibility). Once the individual files the required tax forms, the individual may then attest to the Health Connector that he or she has filed, and the individual may once more be eligible for ConnectorCare. However, if the Connector cannot verify the tax filing by a later data match with IRS, the individual may again lose ConnectorCare/APTC. 

IRS Form 8962 and Instructions for IRS Form 8962.