Employee Benefit News for School, City and County Employers

Premium Tax Credit FAQs Updated

Written by Scott Fritz | Mar 16, 2022 6:48:27 PM

1.5 minute read

The IRS released a FAQ fact sheet on the premium tax credit under the Affordable Care Act (ACA). The updated FAQs address changes for taxpayers for the 2020 and 2021 tax years, including those related to COVID-19 tax relief and the American Rescue Plan Act (ARPA).

The ARPA suspended the requirement that taxpayers repay any excess Advance Payments of the Premium Tax Credit (APTC) they received for the 2020 tax year. The excess APTC is the amount by which the taxpayer’s APTC exceeds the premium tax credit amount they are entitled to, based on their actual income for the year.

The ARPA also temporarily expanded eligibility for the premium tax credit for tax years 2021 and 2022, by eliminating the requirement that a taxpayer’s household income may not be more than 400% of the federal poverty line. The ARPA also allowed an exclusion of up to $10,200 of unemployment compensation in 2020 on an eligible taxpayer’s 2020 tax return, which may affect their premium tax credit amount for 2020.

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This blog is intended to be a compilation of information and resources pulled from federal, state, and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.