# Understanding the 2020 Premium Tax Credit Relief Bill

If you get health insurance through the Affordable Care Act marketplace, the government might help you pay your monthly premiums through something called an "advanced premium tax credit." Here's what happens normally: the government estimates your income and sends money directly to your insurance company to lower your premiums. Then when you file your taxes the next year, you settle up—if the government gave you too much help based on your actual income, you have to pay some of it back. This bill temporarily suspends that payback requirement for the year 2020.

This matters because 2020 was a chaotic year financially for many people. Some folks lost jobs or had their income drop unexpectedly due to the pandemic, while others had income spikes from unemployment benefits or other sources. If you received more premium assistance than you were technically entitled to based on your final 2020 income, you would normally owe that money back when filing your 2020 taxes. This bill says: not this time. You get to keep the full amount of help you received, with no clawback or repayment required.

The practical impact is straightforward—it puts money back in the pockets of people who buy their own health insurance on the marketplace. Instead of getting a bill from the IRS for overpayment of credits, those people simply keep the assistance they already received. This is particularly helpful for people whose financial situations were disrupted during 2020 and who might struggle to repay the government.

To amend the Internal Revenue Code of 1986 to suspend for 2020 the recapture of overpayment of advanced premium tax credit.

Sherrill, Mikie

 <p>This bill suspends for 2020 the recapture of any overpayment of the tax credit for coverage under a qualified health care plan. </p>