Do clients need to file a federal tax return?

Clients must file a federal income tax return after the end of the year regardless of whether they received the premium tax credit in advance or plan to claim it as a lump sum. The client will then use the return to reconcile the difference between the APTC payments and the actual amount of the credit that the client is eligible for at the end of the year.

Individuals who receive APTCs should file a federal tax return because it will impact their future APTC eligibility. For example, individuals who received APTCs for their 2023 Marketplace plan should file and reconcile their 2022 taxes, otherwise they may lose any savings they receive for their 2024 Marketplace plan. Gathering the required documents, filling out the appropriate paperwork, and submitting taxes on time helps ensure that coverage remains accessible and affordable, year after year.

Eligibility for individuals who receive PTCs for the first time will be determined using the financial information in their Marketplace application. For later years, financial eligibility will be determined using the most recent available tax return.

If married, the client must file a joint tax return with their spouse unless the client is a victim of domestic abuse or spousal abandonment. The applicant cannot be claimed as a dependent on someone else’s tax return.

There is no relationship between the CSR and filing taxes. This means that when an individual files taxes at the end of the year, there is no reconciliation process for the CSR.