I am receiving premium tax credits through the federal Marketplace and make just under 400 percent of the federal poverty level (FPL). What happens if I make 401 percent of FPL?
If you exceed 400 percent FPL, then you will need to pay back (at tax time) any premium tax credits you received that year. This could be thousands of dollars.
A married couple tells healthcare.gov that they make 400 percent FPL. Over the course of the year they receive $3,000 in Advance Premium Tax Credits (APTC?s). At tax time, they realize that their income was actually 401 percent FPL, which means they actually do not qualify for the tax credits they have been receiving in advance throughout the year, and they have to pay back the full $3,000 with their taxes. For anyone near 400 percent FPL who wants to qualify for APTC, caution is urged to carefully monitor your income, since working a few extra hours could end up costing you several thousand dollars. Individual experiences may vary and it is important to discuss this impact with your tax professional.
It is very important to log onto www.healthcare.gov or call 1-800-318-2596 and report any changes to your income and/or household makeup.