Yes, you have a solid understanding of how the premium tax credit works.
You do have a choice to either receive the credit in advance via your state exchange, which would result in paying lower monthly premiums all year, or waiting to claim the credit when you file your tax return for 2024 in the spring of 2025.
You are also correct that if you are taking the advance payments to reduce your insurance premiums and you realize your income has changed that it's a wise idea to update that information with the insurance exchange so that the advance payments can be reduced. If you miscalculate your earnings, the IRS will require you to repay any extra premium tax credit that you received when you file, which can result in a large unexpected balance due at tax time.
No matter what you decide to do (taking it in advance or waiting until the end to claim the credit) you can anticipate receiving a Form 1095-A from your marketplace plan for the time frame that you carry that insurance. You will need to include this information in Form 8962 on your tax return when you file for the year. TurboTax will guide you through the steps to enter the required information, and prepare and include the necessary forms when you submit your return.
Clarissa
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