Publication 974 (2023): Premium Tax Credit (PTC)

Publication 974, officially titled "Premium Tax Credit (PTC)," is a resource from the Internal Revenue Service (IRS) that explains the intricacies of this tax credit. This document is crucial for anyone who:

  • Enrolled in a Marketplace health plan in 2023.
  • Received advance payments of the PTC throughout the year.
  • Needs to claim the PTC on their 2023 tax return.

Who is eligible?

  • Individuals and families who enroll in a qualified health plan (QHP) through the Marketplace.
  • Household income must fall within a specific range based on the federal poverty level (FPL).
  • For tax years 2023 through 2025, the income limit has been expanded, allowing individuals with incomes exceeding 400% of the FPL to qualify. (Note: This is an update for tax years 2023-2025, not a permanent change.)

What does the PTC do?

  • Reduces the monthly premium cost of your QHP.
  • The amount of the credit is based on your estimated household income and family size.
  • Advanced payments of the PTC can be made directly to your insurance company throughout the year.

Publication 974 covers essential details such as:

  • Eligibility criteria: Specific income ranges, citizenship status, and other requirements.
  • Calculating your PTC: Step-by-step instructions on estimating your credit amount.
  • Claiming the PTC: Instructions for filing Form 8962 and reconciling advance payments.
  • Special circumstances: Situations affecting eligibility, like employer-sponsored coverage and individual coverage HRAs.

Important updates for 2023:

  • The income eligibility range for the PTC has been expanded for tax years 2023 through 2025. This means more individuals and families may qualify for the credit.
  • The Health Coverage Tax Credit (HCTC), which was available for some taxpayers in previous years, has expired.

For the current year's Publication 974, click here.

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