What is the Advanced Premium Tax Credit (APTC)?
The APTC is a federal tax credit designed to help lower your monthly costs for health insurance purchased through Covered California and is funded by the federal government.
How does my APTC affect my federal income taxes?
Learn more about how to claim the premium tax credit on your federal tax return, or view the ACA tax provisions for individuals.
How do I claim APTC on my federal tax return?
For any tax year, if you receive APTC payments in any amount or if you plan to claim the APTC, you must file a federal income tax return for that year.
In the first quarter of the year, Covered California will mail IRS Form 1095-A. This form will help you reconcile the APTC you received for the current benefit year to the actual amount of Federal Premium Tax Credit you were eligible for in that year based on the actual Modified Adjusted Gross Income you report to the IRS on your taxes.
For more information, visit our resources for tax season page or the IRS website for tax filing tips and ACA tax provisions for individuals.
Once I update my income, when will my APTC appear on my bills?
Once you have reported your income, Covered California will decide whether it should adjust your premium help. If there is a change to your premium help, the new amount will be reported to us. Your bill will be updated in one to two billing cycles after the information is received to reflect your most current premium help. In the meantime, please pay the amount billed. We will make any necessary adjustments if you are owed a credit.
What are the tax penalties for not having health coverage?
Although the federal government zeroed out the federal tax penalty in 2019, California enacted legislation to restore the individual mandate and tax penalty starting in 2020. Those who choose to go without coverage may be subject to a penalty as part of their annual state tax filing if they have access to affordable coverage within the cost limitations set by the state. There can be penalties of up to nearly $2,250 per family, which is based on 2.5 percent of household income or a minimum of $750 per adult and $375 per dependent child under 18 in the household, whichever is greater. The California Franchise Tax Board, which administers the state mandate, will assess the penalties for the coverage year when consumers file their taxes. Californians can file for an exemption due to financial or other hardship with Covered California. Visit Covered California to learn more or, for additional information, visit the California Franchise Tax Board.
If the federal individual mandate penalty is reinstated at any point, the state tax penalty will be adjusted.
To avoid the tax penalty, you must have health coverage for at least nine months of the year. If you're uninsured for just part of the year, one-twelfth of the yearly penalty applies to each month you're uninsured.
We're not tax professionals and cannot provide tax advice. If you need help, please get advice from a professional tax preparer or adviser.
Need more help? Visit the IRS website for tax filing tips and ACA tax provisions for individuals.