Loading glossary term
Glossary
Tax credits paid upfront that you can use to lower your insurance payment.
Advanced premium tax credits are similar to premium tax credits, however instead of receiving the credit at the end of the year on your taxes, the credit is calculated and sent directly to your health insurance company who uses it to lower your monthly premiums (opens in new tab).
In this case, when you apply through the health insurance Marketplace (opens in new tab), you can choose to have a credit paid directly to your insurance company, which will lower your premium. If you choose this option, you’ll need to reconcile what was paid the insurance company with what was allowed as a credit. This is done using Form 8962, Premium Tax Credit (PTC) when you file your tax returns for the year.