How do subsidies (tax credits) work?
“Subsidies” are tax credits which help pay for your marketplace coverage. The amount you get is based on your anticipated income for the plan year. How you choose to take those credits, how much income you estimated, and whether or not you reported changes to your income can impact your tax filings.
What if my income changes?
It’s very important to keep your income information up to date, making sure to include whether you made more or less than you reported. When you file your taxes, the IRS compares or “reconciles” how much you made and how much you reported. If you made less than you reported, you could get a lower tax bill or higher return. If you made more than you reported, you will need to pay the excessive tax credits you received back to the IRS.
What forms will I need?
If you are enrolled in Marketplace coverage, you will receive a Form 1095-A. This tax form shows all the months your health insurance coverage through CoverME.gov was active. If you received health insurance through another source, this form will not reflect that coverage. This form also shows the premium costs and any advanced premium tax credits (APTC) your tax household got during the year.
When you file your taxes, you will use Form 1095-A to fill out Form 8962. Form 8962 is an IRS form used to reconcile the tax credits. The 1095-A form will either be mailed to you before January 31st, or you can find it in your CoverME.gov account.
This printable flyer helps explain tax rules related to marketplace health coverage.
Find more details on the 1095-A FAQs page at CoverME.gov.
