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11-19-2016 01:58 PM
I have a quick question regarding Premium Tax Credits for the ACA.
This past year, we enrolled for a new health plan. Because of several unknown factors with our income, we overestimated our income just to be safe. I know that we are able to reconcile this on our tax form and will recieve what we "overpaid" for health insurance back.
I just want to make sure that our 2017 health insurance premium won't be adjusted, because from year to year our total income might be different. We would rather overestimate than underestimate.
Am I correct that any refund that we will get for 2016 will not affect our Premium or Credit amounts for 2017? Any help or advice is much appreciated!
11-19-2016 03:16 PM - edited 11-19-2016 03:22 PM
Welcome to the community.
I'll be glad to assist you. Health insurance is one of my areas of expertise.
Your health insurance premium itself will not be affected by your income being overestimated. If anything affects your premium it would be if there is a general increase in premiums across the board or if you changed something on your policy.
As a result of your income being over estimated you are correct that you will receive additional refundable credit on your tax return. The amount of premium tax credit you are eligible for is officially determined on your tax return each year and is not affected by previous years.
If you underestimate your income that's when you could end up having to repay some or all of the credit.
Hope this helps.
Senior Tax Advisor (Tampa, FL)