Folks with health insurance procured through the Health Insurance Marketplace may be receiving advance payments of the premium tax credit. These are paid to your insurance company with a goal of lowering your monthly premium.
Changes in circumstances can alter the amount of these advance payments, including:
- An increase or decrease in your income
- Marriage or divorce
- Birth or adoption of a child
Changed conditions such as these can result in the credit ending up too much or too little, which can result in an unpleasant surprise at tax time.
Folks are supposed to report changes in their situation to the Marketplace as they occur. Check out IRS Health Care Tax Tip 2014-15 for more info.