What you should know about the Obamacare premium tax credit

2014

If you buy health insurance through a Obamacare marketplace, you may be eligible for a premium tax credit. You may use the credit to offset the premiums throughout the year or claim the full credit at year-end when you file your income tax return.

At the start of a year, your credit is an estimate based on what you think your income will be during the year. A lot can happen to change the credit making it more or less than anticipated. That means you could end up owing money back on the credit you received.

A change in family status or income are the most likely situations that can change the credit during a year. To avoid an unpleasant surprise at year-end the IRS advises informing your marketplace immediately of any changes you have affecting the credit. Remember, even a relative minor increase in family income could cause a reduction in the credit or complete loss of the credit for the entire year.

Click here to find facts and tips for dealing with the credit and your changing circumstances.