Report: IRS Develops ACA Health Care Premium Tax Credit System
The Internal Revenue Service (IRS) has completed development and testing of software to calculate the Advanced Premium Tax Credit and the Remainder Benchmark Household Contribution (RBHC) which is the household’s contribution towards the monthly insurance premium. In a report on the system, the Treasury Inspector General for Tax Administration (TIGTA) concludes that the IRS now needs to strengthen systems development controls for the project.
The PTC is part of the Affordable Care Act (ACA). Beginning January 2014, eligible taxpayers who purchase health insurance through the Health Insurance Marketplace (an Exchange) may qualify for and request a refundable tax credit (the PTC) to assist with paying their health insurance premium. The credit is claimed on the taxpayer’s Federal tax return at the end of each coverage year. Because it is a refundable credit, taxpayers who have little or no income tax liability can still benefit. The PTC can also be paid in advance to a taxpayer’s health insurance provider to help cover the cost of premiums. This credit is referred to as the Advanced Premium Tax Credit (APTC).