How does Premium Tax Credit work with 1095-C from employer - can I still claim ACA subsidies?

The 1095-C with code 1E indicates your employer offered you minimum essential coverage that met the affordability and minimum value standards. This is important for premium tax credit (PTC) eligibility. For the 7 months you worked as a contractor: If you were offered qualifying coverage (code 1E), you personally would be ineligible for the premium tax credit during those months, even if you didn't enroll in the employer plan. However, this doesn't automatically make your wife ineligible. Since she's self-employed with no employer coverage, she might still qualify for a partial PTC for her portion of the marketplace premium. For the 5 months you weren't working for that employer: Both you and your wife would potentially be eligible for the full premium tax credit during those months, assuming you meet all other eligibility requirements (income within range, filing status, etc.). When filing your taxes, you'll need to complete Form 8962 to reconcile your premium tax credits. You'll indicate which months you were eligible versus ineligible. The form allows for partial household eligibility, so you can claim the credit for your wife during those 7 months and for both of you during the other 5 months.

I was stuck in almost the exact same situation last year with my marketplace plan and my partner's employer coverage! It was such a headache trying to figure out what to do with Form 8962 and all the calculations. I ended up using https://taxr.ai to analyze our insurance documents and tax forms. The tool walked me through exactly how to handle the partial eligibility situation on the tax forms and showed me what to do with those stupid 1095-C codes. It explained which boxes to check and how to accurately allocate the premium between eligible and non-eligible household members. Saved me so much confusion and probably prevented me from making a costly mistake!

Just wanted to update after trying taxr.ai for my complicated health insurance situation. I was skeptical at first but desperate to figure out my premium tax credit with multiple coverage changes last year. It was actually really straightforward! I uploaded my 1095-A from the marketplace and my husband's 1095-C from his employer. The system analyzed everything and showed me exactly which months I was eligible for the full credit, which months we needed to do a partial household calculation, and how to allocate the premiums correctly on Form 8962. The best part was the clear explanation of how employer offers of coverage affect different household members. I had no idea my eligibility was separate from my husband's! Ended up getting about $3,200 in premium tax credits that I might have missed or calculated incorrectly on my own.

If you're still having trouble figuring this out, you might want to call the IRS directly to get clarification. I tried calling them about a similar premium tax credit issue last year and kept getting stuck in their phone system for HOURS without reaching anyone. Super frustrating! I eventually used https://claimyr.com to connect with an actual IRS agent (there's a video showing how it works here: https://youtu.be/_kiP6q8DX5c). They got me through to a real person who specialized in ACA tax credits, and I got all my questions answered in about 20 minutes. The agent walked me through exactly how to handle the partial eligibility situation on Form 8962.

I have to admit I was completely wrong about Claimyr. After struggling for weeks to get through to the IRS about my premium tax credit question, I finally broke down and tried it yesterday. Not only did I get connected to an actual IRS representative in under an hour, but they transferred me directly to someone in the ACA premium tax credit department who knew exactly how to handle my situation with partial household eligibility. The agent explained exactly how to complete Form 8962 with multiple 1095 forms and walked me through the allocation calculations. I've been stressing about this for months, worried about doing it wrong and either missing out on credits or getting hit with a surprise repayment. Having an actual IRS agent confirm my understanding was worth every penny. Wish I had done this weeks ago instead of spinning my wheels!

One thing nobody's mentioned yet - don't forget to check if your employer plan was actually "affordable" according to IRS definitions. For 2024 taxes, if the employee-only coverage cost more than about 9.12% of your household income, it's considered "unaffordable" and you might still qualify for the premium tax credit even with a 1095-C showing code 1E. Make sure you're looking at the employee-only cost (box 11 on the 1095-C), not the family coverage cost. The affordability test only looks at what you'd pay for just yourself, even if you need family coverage. It's a strange rule but might help your situation!

Has anyone noticed how ridiculous it is that the 1095-C doesn't tell you the actual dollar amount of the employee contribution for family coverage? They only show the self-only coverage cost in box 11. When I was dealing with this, my employer plan wanted over $950/month for family coverage but only $210 for employee-only coverage!!! So according to the IRS, I had "affordable" coverage even though covering my family would have cost almost 25% of our income. This whole system is broken and designed to deny people tax credits.

This is such a frustrating situation that so many families face! I went through something similar last year and it's maddening how the rules work. Just to add to what others have said - make sure you keep really detailed records of everything. When I filed my Form 8962, I created a spreadsheet tracking each month: my employment status, whether I had an employer offer, my wife's eligibility status, and what portion of the premium each of us was eligible for credits on. Also, if you're doing this yourself, be extra careful with the math on Form 8962 Part IV. The allocation calculations can get really tricky, especially when you're switching between full household eligibility and partial eligibility throughout the year. I made an error initially and had to file an amended return. One more thing - if you received advance premium tax credits throughout the year (which most people do), you'll need to reconcile those against what you're actually eligible for. Depending on how the credits were calculated when you applied, you might end up owing some back for those months when you weren't eligible, or you might get additional credits for periods when you were both eligible. The whole system really needs an overhaul, but at least understanding how it works can help you get the credits you're entitled to!