Vermont Health Connect paid an estimated Premium Tax Credit (subsidy) to your insurance company based on your projected income. If your income at the end of the year is different from your projected income, you may have to pay some Premium Tax Credit back when you file your taxes. The IRS decides the correct amount of Premium Tax Credit based on your household’s income. The law does not make exceptions for your innocent mistakes or mistakes made by Vermont Health Connect.
If you have to repay some or all of the Premium Tax Credits that were paid to lower the cost of your Vermont Health Connect insurance plan, the amount you have to repay will be added to the tax you owe.
There is a limit on how much people with lower incomes have to repay. The limits are based on the income shown on your tax return. This table shows examples for a single adult and a married couple with two children.
The lower limits apply to people who use the Single tax filing status. The higher limits apply to everyone else, including people who file as Head of Household.
Talk to your tax preparer about which filing status you should use.