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When you or a family member applies for the Health Insurance Marketplace coverage, the Marketplace will estimate the amount of the Premium Tax Credit that you may be able to claim for the tax year, using the information you provide about your family composition, projected household income, and other factors, such as whether those whom you are enrolling are eligible for other, nonMarketplace coverage. Based on that estimate, you can decide if you want all, some, or none of your estimated credit paid directly to your insurance company to lower your monthly premiums.
If you choose to have advance credit payments made on your behalf, you will be required to file Form 8962 with your income tax return to reconcile the amount of advance payments with the Premium Tax Credit that you may claim based on your actual household income and family size.
If you do not opt for advance credit payments or the Marketplace determines that you were not eligible for advance payments at the time of enrollment, you should determine if you are eligible to claim the credit because your circumstances changed during the year. To claim the credit, you must file Form 8962 when you file your tax return for the year, which will either lower the amount of taxes owed on that return or increase your refund.