Asked by T
The Premium Tax Credit is a credit that helps pay the cost of health care coverage through the Health Insurance Marketplace. All the following are true, EXCEPT:
Form 8962, Premium Tax Credit, calculates the taxpayer's Premium Tax Credit and reconciles it with any Advance Premium Tax Credit (APTC) received.
Taxpayers are not required to reconcile the Premium Tax Credit.
The Premium Tax Credit is either advanced to the taxpayer or refunded through their income tax return as a refundable credit.
The tax family includes the taxpayer, spouse, and anyone who is claimed as a dependent on the tax return.
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The false statement is:
- "Taxpayers are not required to reconcile the Premium Tax Credit."
Why: Taxpayers who received Advance Premium Tax Credit (APTC) must file Form 8962 with their federal return to reconcile APTC with the actual Premium Tax Credit. Even taxpayers who did not receive APTC but want to claim the credit must file and complete Form 8962. Failing to reconcile can lead to repayment of excess APTC and affect future eligibility.
- "Taxpayers are not required to reconcile the Premium Tax Credit."
Why: Taxpayers who received Advance Premium Tax Credit (APTC) must file Form 8962 with their federal return to reconcile APTC with the actual Premium Tax Credit. Even taxpayers who did not receive APTC but want to claim the credit must file and complete Form 8962. Failing to reconcile can lead to repayment of excess APTC and affect future eligibility.
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