What happens to the extra Premium Tax Credit money if it's not needed to pay for Health Care Plan premium purchased through Healthcare.gov ?

[Ben142]

My wife & I qualified for a Premium Tax Credit of $2553 monthly for 2018 using Healthcare.gov website. We purchased Blue Cross Silver Plan Insurance plan that costs $2000 monthly. We chose the Advanced premium Tax Credit of $2000 monthly making our monthly Premium $0. In the past I chose the entire PTC which reduced premium to about $200 a month. The PTC is much more this year since we are both retired at age 64 with lower income.

What happens to the additional $553 PTC we qualified for?  I know I could choose a more expensive plan but we are satisfied with the plan we have.

[ghost]

The PTC you do not use is forfeited. It stays in the ACA for other eligible taxpayers.

[TaxGuyBill]

The Premium Tax Credit that you would qualify for is the LOWER of (1) $2553 or (2) the actual cost of insurance.

[inbb2b]

Thanks, that's what I thought but this PTC explanation on irs.gov confused me

The credit is “refundable” because, if the amount of the credit is more than the amount of your tax liability, you will receive the difference as a refund. If you owe no tax, you can get the full amount of the credit as a refund

[inbb2b]

<a rel="nofollow" target="_blank" href="https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-premiu...>

[TaxGuyBill]

Yes, it is a refundable tax credit.  As you pointed out, a "refundable credit" means you can receive it if your TAX is less than that amount.  But the calculation of the credit is limited to the lower of $2553 (in your case) or your actual cost.

So if your tax return only shows $5000 in tax, and your Premium Tax Credit is $24,000 (if you did not receive any advance credit, but choose to take it all on your tax return), you could still receive a refund of $19,000 (it is not limited to $5000).  But that does not change that the credit itself is limited to the the amount of the cost of insurance.

[mjohnson76401]

Thank you for this correct answer and clear explanation.  Both the 2 Marketplace representatives I spoke with told me incorrectly. And I upgraded and paid the $50 for an "expert CPA" to assist me.  I spoke with one who I am pretty sure was drunk...and another attempted to be helpful, even called me back twice. But, unfortunately, he told me wrong also.  Healthcare.gov and Turbotax experts both told that that since it is "refundable" then I would get back any unused premium credit as an increase to my refund.  This would only happen if I owed taxes (which I don't) . I don't get the difference between the CREDIT and the PREMIUM back. The credit won't be higher than the total premium.