IRS Publication 974 — Premium Tax Credit
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“• A premium for health insurance coverage established under your business (or the S corporation in which you were a more-than-2% shareholder) but paid for cover- age in a plan that is not a qualified health plan.”
Andrew enrolls himself and his three dependents, Terri, Phil, and Anne, in a qualified health plan. Anne is not lawfully present in the United States and is disenrolled from the coverage as of April 1. Andrew becomes eligible for employer-sponsored coverage on September 1, notifies the Marketplace, but remains enrolled in the qualified health plan. The Marketplace reports the following amounts in Form 1095-A, Part III.
Months Column A Column B Column C January, February, March … $1,000 $1,200 $953 April through August … $800 $900 $653 September through December … $800 $400 $153 Step 1. Andrew completes Part I of Form 8962 (not illustrated). His household income for the year on his Form 8962, line 3, is $85,800, which is 275% of the federal poverty line. The annual contribution amount Andrew enters on line 8a is $4,290 and the monthly contribution amount he enters on line 8b is $358.
Step 2. Andrew determines his monthly enrollment premiums and applicable SLCSP premium using the instructions under How To Determine Your Monthly Premium and Applicable SLCSP Premium, earlier. Situation 2 in that discussion applies to Andrew because he has a lawfully present family member enrolled in coverage and there are changes in his coverage family in 2025, counting only lawfully present family members: beginning in September, only Phil and Terri are in the coverage family. Andrew is no longer in the coverage family because he becomes eligible for employer-sponsored coverage. Andrew completes Worksheet A as explained below to determine his reference months for the enrollment premiums and the applicable SLCSP premium for the months Anne was enrolled. (Andrew’s Worksheet A is shown later.)
Line 1. He checks the boxes for January, February, and March because those are the months in which Anne is enrolled in Marketplace coverage.
Line 2. He checks the boxes for April through December. Those months are reference months for enrollment premiums ($800) for January through March because his tax family for these months (Andrew, Phil, and Terri) is the same as for January through March except for Anne. Line 3. He checks the boxes for April through August. These months are reference months for the applicable SLCSP premium ($900) for January through March because Andrew’s coverage family for these months (Andrew, Phil, and Terri) is the same as for January through March except for Anne. September through December are not reference months for the applicable SLCSP premium (and Andrew doesn’t check these boxes) because, as explained above, there was another change in his coverage family beginning in September.
Step 3. Andrew checks “No” on line 9 because he is neither allocating policy amounts with another taxpayer nor using the alternative calculation for year of marriage.
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