Almost two-thirds of tax filers who received insurance via the state or federal insurance Marketplaces had to pay back an average of $729 of the Advance Premium Tax Credit (APTC), cutting their potential refund by almost one-third, according to analysis of filing data by H&R Block (NYSE: HRB), the world’s largest consumer tax preparation company. The Advanced Premium Tax Credit was designed to pay a portion of a person’s health insurance premium each month, the amount was based upon projected income amounts. The intent is to help make health insurance “affordable”. So, for example, if your health insurance premium on the individual exchange was $500 per month, and you got a premium tax credit, you might pay $250 and the government would pay the other $250.
However, if you projected your income incorrectly when you signed up, or it changed during the year, you might not qualify for the original subsidy amount. So you’d have to pay back part or all of the subsidy at tax time.
H&R Blocks research found that the average refund for those with an APTC who filed was $2,195. The average premium tax credit reconciliation repayment amount was $729, which equated to a 33-percent reduction from their average refund.
Here is a link to the H&R Block article: http://newsroom.hrblock.com/hr-blocks-final-aca-stats-refunds-impacted-received-advance-tax-credit/