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Publication 17

Chapter 37
Premium Tax Credit (PTC)(p245)

What’s New(p245)

At the time this publication went to print, Congress was considering legislation that would do the following.
  1. Provide additional tax relief for those affected by Hurricane Harvey, Irma, or Maria, and tax relief for those affected by other 2017 disasters, such as the California wildfires.
  2. Extend certain tax benefits that expired at the end of 2016 and that currently can’t be claimed on your 2017 tax return.
  3. Change certain other tax provisions.

To learn whether this legislation was enacted resulting in changes that affect your 2017 tax return, go to Recent Developments at
Qualified small employer health reimbursement arrangement (QSEHRA).(p245)
Under a QSEHRA, an eligible employer can reimburse eligible employees for medical expenses, including premiums for Marketplace health insurance. If you were covered under a QSEHRA, your employer should have reported the annual permitted benefit in box 12 of your Form W-2 with code FF. See Qualified Small Employer Health Reimbursement Arrangement in Pub. 974 for more information.


Report changes in circumstances when you re-enroll in coverage and during the year.(p245)
If advance payments of the premium tax credit (APTC) are being paid in 2018 for an individual in your tax family (described later) and you have had certain changes in circumstances (see the examples below), it is important that you promptly report them to the Marketplace where you enrolled in coverage. Reporting changes in circumstances promptly will allow the Marketplace to adjust your APTC to reflect the premium tax credit (PTC) you are estimated to be able to take on your tax return. Adjusting your APTC when you re-enroll in coverage and during the year can help you avoid owing tax when you file your tax return. Changes that you should report to the Marketplace include the following.
  • Changes in household income.
  • Moving to a different address.
  • Gaining or losing eligibility for other health care coverage.
  • Gaining, losing, or other changes to employment.
  • Birth or adoption.
  • Marriage or divorce.
  • Other changes affecting the composition of your tax family.
For more information on how to report a change in circumstances to the Marketplace, see or your State Marketplace website.
Health coverage tax credit (HCTC).(p245)
The HCTC is a tax credit that pays a percentage of health insurance premiums for certain eligible taxpayers and their qualified family members. The HCTC and the PTC are different tax credits that have different eligibility rules. If you think you may be eligible for the HCTC, see Form 8885 and its instructions or visit before completing Form 8962.
Health insurance options.(p245)
If you need health coverage, visit to learn about health insurance options that are available for you and your family, how to purchase health insurance, and how you might qualify to get financial assistance with the cost of insurance.
Additional information.(p245)
For additional information about the tax provisions of the Affordable Care Act (ACA), including the individual shared responsibility provisions, the PTC, and the employer shared responsibility provisions, see or call the IRS Healthcare Hotline for ACA questions (1-800-919-0452).
You may be able to take the PTC only for health insurance coverage in a qualified health plan purchased through a Health Insurance Marketplace (also known as an Exchange). This includes a qualified health plan purchased on or through a State Marketplace.
This chapter provides an overview of the following.


Useful items

You may want to see:

 974 Premium Tax Credit (PTC)
Form (and Instructions)
 1095-A: Health Insurance Marketplace Statement
 8962: Premium Tax Credit (PTC)

What is the Premium Tax Credit (PTC)?(p245)


Premium tax credit (PTC).(p245)

The PTC is a tax credit for certain people who enroll, or whose family member enrolls, in a qualified health plan. The credit provides financial assistance to pay the premiums for the qualified health plan offered through a Marketplace by reducing the amount of tax you owe, giving you a refund, or increasing your refund amount. You must file Form 8962 to compute and take the PTC on your tax return.

Advance payment of the premium tax credit (APTC).(p245)

APTC is a payment during the year to your insurance provider that pays for part or all of the premiums for a qualified health plan covering you or another individual in your tax family. Your APTC eligibility is based on the Marketplace’s estimate of the PTC you will be able to take on your tax return. If APTC was paid for you or another individual in your tax family, you must file Form 8962 to reconcile (compare) this APTC with your PTC. If the APTC is more than your PTC, you have excess APTC and you must repay the excess, subject to certain limitations. If the APTC is less than the PTC, you can get a credit for the difference, which reduces your tax payment or increases your refund.
See Alternative calculation for year of marriage next for a special rule that may reduce your excess APTC if you got married in 2017.
Note.The Marketplace determined your eligibility for and the amount of your 2017 APTC using projections of your income and your number of personal exemptions when you enrolled in a qualified health plan. If this information changed during 2017 and you did not promptly report it to the Marketplace, the amount of APTC paid may be substantially different from the amount of PTC you can take on your tax return. See Report changes in circumstances when you re-enroll in coverage and during the year, earlier, for changes that can affect the amount of your PTC.
Alternative calculation for year of marriage.(p245)
If you got married during 2017 and APTC was paid for an individual in your tax family, you may want to use the alternative calculation for year of marriage, an optional calculation that may allow you to repay less excess APTC than you would under the general rules. You will determine your eligibility using the Instructions for Form 8962 and compute the alternative calculation using Pub. 974.