Millions may get a tax refund under ObamaCare. If your income was lower than projected, and you had a Marketplace plan, you may get an ObamaCare tax refund.
Why Millions May Get a Refund
Everyone who got a Tax Credit (any of the 8 million who enrolled who made less than 400% of the Federal Poverty Level) need to file Form 8962, Premium Tax Credit (PTC). Most people will have a slightly higher or lower income than reported or will experince a life change. That means millions who took at least part of the Tax Credit upfront may get a refund, while millions more may have to pay back excess Advanced Tax Credit Payments.
If you didn’t get the whole credit up-front, or your income was less than you projected when you filled out your marketplace application, there is a good chance you’ll get a refund. Either way, you are going to have to fill out the form.
NOTE: There are limits to how much you can owe back to the IRS for excess Advanced Tax Credit Payments.
How to Get a Tax Refund Under ObamaCare?
Getting a tax refund under ObamaCare is simple. All you have to do is fill out Form 8962, Premium Tax Credit (PTC) and show that the amount that you were paid in advance is less than you were owed. Whatever amount you are owed based on your Modified Adjusted Gross Income and family sizes will be applied to your tax refund. So even if you had a marketplace plan and didn’t get any cost assistance up front, you could still be owed a refund.
If you don’t fill out the form, you won’t get to take advantage of refundable tax credits. And if you made more than projected, you could end up owing more. Even slight fluctuations in income can change Tax Credits. So do yourself a favor and file form 8962. You can use our ObamaCare Facts simplified instructions for Form 8962, Premium Tax Credit (PTC) to make the process easier.
NOTE: The form is only filled out once per household claiming taxes together.
Form 1095-A is the Key
You’ll need to have form 1095-A on hand to fill out form 8962. The marketplace files those on January 31st, 2015. So look for yours shortly after. If you didn’t have Marketplace coverage, you might not see the form until next year. Don’t fret, you can report your coverage on your 1040 based on the honor system. See our ObamaCare Facts simplified guide to 1095 forms.
And May as Well Discuss the Exemptions Form
While an exemption won’t get you a refund, it will save you from owing the Shared Responsibility Payment on your 1040. That is important. You’ll fill out Form 8965 if you went even one month without coverage in 2014. So may as well get that form ready too. See our ObamaCare Facts simplified instructions for Form 8965, Health Coverage Exemptions.
Get more information on filing taxes under the Affordable Care Act.