When calculating quarterly estimated tax payments, do ACA premium tax credits count?

[kt_1989]

I receive about $500 advance premium tax credit through ACA every month for my health insurance, and pay a $45 out of my own pocket. Self-employed, single.

• Do these advance premium tax credits count toward my self-employed income on Schedule C?
• If not, do they count toward my adjusted gross income?

I know they will need to be reported in some way on my 2023 taxes (will let the software handle that). I am just needing to know if they need to be accounted for in my quarterly estimated tax payments. They'll make quite a substantial difference in my income if they have to be included.

[MonikaK1 · Accepted solution]

Your Advance Premium Tax Credit payments are not income, they are payments toward a credit that you expect to qualify for on your 2023 tax return. They don't need to be accounted for in calculating your estimated tax payments. 

The credit and the advance payments are all reconciled on Form 8962. Ideally, you are only receiving enough premium assistance so that you don't owe additional tax with your 2023 return from receiving excess subsidy payments. To avoid this situation, be sure to report to your insurer if you have a substantial increase in your income during the year, and have them decrease the subsidy/ advance payment.

See this article for more information about the Premium Tax Credit and Form 8962.

See this article for more information about calculating estimated taxes.

[kt_1989]

Thank you so very much for the straightforward reply, I really appreciate it.  @MonikaK1