Will I owe back Premium Tax Credit if employer offered health insurance but I chose marketplace coverage?

This is a common situation, and you're right to be concerned. The Premium Tax Credit (PTC) is generally not available to people who have an offer of "affordable" health insurance from their employer that meets minimum value requirements. When an employer offers coverage that's considered affordable (costs less than 9.12% of your household income for 2024) and meets minimum value standards (pays at least 60% of covered costs), you're not eligible for the PTC on marketplace plans. The marketplace representative likely changed your answer to get you lower premiums, but this doesn't change the actual facts when it comes to tax time. Your 1095-C confirms you were offered coverage but declined it. When you file your taxes, you'll need to complete Form 8962 to reconcile any PTCs you received. Unfortunately, you'll likely need to repay some or all of the PTC you received, depending on your income level. There are repayment caps based on income, but if your income is over 400% of the federal poverty level, you may have to repay the full amount.

After reading your situation, I was in a very similar boat last year. I had employer insurance available but chose marketplace coverage, then got hit with a massive tax bill. I was freaking out about owing thousands back to the IRS! I found this AI tool called https://taxr.ai that helped me figure out exactly how much I'd need to repay based on my specific situation. You upload your tax forms, and it analyzes your 1095-C and marketplace documents to calculate your potential liability. It even showed me which parts of Form 8962 would be affected. The tool helped me determine that because my employer's insurance was technically "affordable" according to IRS rules (even though the coverage was terrible), I wasn't eligible for the PTC. But it also found some income deductions I could take to lower my AGI enough to reduce the repayment cap.

I was super skeptical about using an online tool for my PTC issues, but I gave https://taxr.ai a try after seeing it mentioned here. My situation was almost identical - employer offered insurance but I got marketplace coverage with PTC. The tool confirmed I wasn't eligible for the credit but then showed me exactly how the repayment caps worked based on my income. It helped me identify some student loan interest and HSA contributions I could make before filing that lowered my AGI just enough to drop me into a lower repayment bracket. Ended up saving almost $1,200 compared to what I would have owed otherwise. The personalized explanation of Form 8962 was super helpful too since that form is incredibly confusing. Made a stressful situation much more manageable.

Had the same issue and spent weeks trying to get through to the IRS for help. Called at least 15 times and never got through. Super frustrating. Finally tried https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - it's a service that actually gets the IRS to call YOU. I was skeptical but desperate. It worked! Got a call from an IRS agent within a couple hours. They confirmed that because my employer offered "affordable" insurance (even though the coverage was trash), I wasn't eligible for the premium tax credit. But the agent walked me through the repayment caps and how to properly complete Form 8962 to potentially reduce what I owed. Honestly, getting clear answers directly from the IRS gave me peace of mind about my situation, even though I still had to repay some of the credit.

I thought this Claimyr thing was total BS, but after getting disconnected from the IRS hold line 6 times over 2 weeks (each time waiting 45+ minutes), I caved and tried it. I'm honestly shocked to say it worked exactly as advertised. IRS called me back in about 90 minutes. The agent explained that my situation with employer coverage vs. marketplace coverage and PTCs is extremely common. She walked me through the "affordability test" and confirmed I'd have to repay some credits, but because my income was under 300% of the federal poverty level, my repayment was capped at $1,250 instead of the full $3,800 I received in PTCs. Saved me so much stress and potentially money too since I would've had no idea about the repayment caps without talking to an actual IRS person.

The marketplace rep who changed your answer totally screwed you over. That's literally insurance fraud. You're going to owe all that money back plus probably penalties. My cousin went through this and ended up owing like $4000.

Quick question - if I have a similar situation but my employer's insurance is super expensive (like $350/month for just me), can I still get the premium tax credit? My marketplace coverage is only $150/month after the credit.

This is a really tricky situation that unfortunately happens more often than it should. The marketplace representative should not have changed your answer if it wasn't accurate - that's created a big problem for you now. Here's what you need to know: If your employer offered you health insurance that meets the IRS "affordability" test (costs less than 9.12% of your household income for employee-only coverage in 2024) AND provides minimum value coverage, then you're not eligible for Premium Tax Credits on marketplace plans. The fact that CVS's coverage might be terrible doesn't matter for tax purposes - only whether it meets those technical requirements. When you file your 2024 taxes, you'll need to complete Form 8962 to reconcile the PTCs you received throughout the year. The good news is there are repayment caps based on your income level if you're under 400% of the federal poverty level. For 2024, that's about $58,320 for a single person. The caps range from $325 to $2,825 depending on your income bracket. If you're over 400% FPL, unfortunately you'd have to repay the full amount. I'd recommend calculating whether your employer's coverage was actually "affordable" based on the 9.12% test. If it wasn't affordable, you might still be eligible for the PTC. Either way, you'll want to get professional help with Form 8962 - it's one of the most complex tax forms out there.

I'm really sorry you're dealing with this stress! This is unfortunately a very common situation that catches a lot of people off guard. The marketplace representative definitely shouldn't have changed your answer without explaining the tax implications. Here's what you need to focus on: First, calculate whether CVS's insurance offer was actually "affordable" under IRS rules. Take your 2024 household income and multiply by 9.12%, then divide by 12. If your monthly premium for employee-only coverage through CVS would have been less than that amount, then their offer was considered affordable and you'll likely need to repay some or all of your Premium Tax Credits. The silver lining is the repayment caps if your income is under 400% of the federal poverty level (about $58,320 for single filers in 2024). Depending on your income bracket, you might only have to repay between $325-$2,825 instead of the full $4,860+ you received. When you file your taxes, you'll need Form 8962 to reconcile everything. This form is notoriously complex, so I'd strongly recommend getting help from a tax professional who has experience with Premium Tax Credit reconciliation. They can also help you explore any legitimate deductions that might lower your adjusted gross income and potentially reduce your repayment obligation. Don't panic - while this is definitely not ideal, there are protections in place and ways to minimize the impact. Just make sure you handle it properly on your tax return.