Do You Get Money Back From a 1095-C on Your Tax Return?

A 1095-C form provides details about the health insurance your employer offered but does not directly determine whether you receive a tax refund. Its primary function is to confirm employer compliance with the Affordable Care Act (ACA). Many taxpayers wonder if this form influences their tax return, but its impact is indirect.

While the 1095-C itself doesn’t generate a refund, other factors—such as premium tax credits and income level—can affect how much you owe or receive. Understanding these connections helps clarify how health coverage influences your tax situation.

Employer Coverage on Tax Returns

The 1095-C form documents that an employer provided health insurance meeting ACA requirements. While not required for submission with a tax return, the IRS may use it to verify employer-sponsored coverage and determine whether penalties apply.

For individuals who declined employer coverage, the IRS may assess whether they obtained alternative insurance or remained uninsured. Although the federal penalty for lacking coverage was reduced to $0 in 2019, some states, including California, Massachusetts, and New Jersey, impose their own penalties. In these states, the 1095-C can help determine whether a taxpayer owes a state-level fine.

Employers use the 1095-C to confirm compliance with the ACA’s employer mandate, which requires businesses with 50 or more full-time employees to offer affordable health insurance that provides minimum value. The IRS defines affordability as a plan costing no more than 8.39% of household income in 2024. Employers failing to meet these requirements may face penalties under the employer shared responsibility provisions.

Premium Credits That May Increase Refunds

The premium tax credit (PTC) helps individuals and families afford health insurance purchased through the Health Insurance Marketplace. Unlike employer-sponsored insurance, which is reported on a 1095-C, the PTC applies to those who buy coverage independently and meet income criteria. Households earning between 100% and 400% of the federal poverty level (FPL) generally qualify, though temporary expansions have removed the upper income cap through 2025.

Taxpayers receiving advance premium tax credits (APTC) must reconcile them when filing taxes. If actual income exceeds the estimate used to calculate the APTC, a portion may need to be repaid. If income was overestimated, taxpayers may receive an additional refund. This reconciliation is completed using Form 8962, which compares the total PTC with the APTC received.

Individuals offered employer-sponsored insurance may still qualify for the PTC if their employer’s plan is unaffordable or lacks minimum value. If an employee’s required contribution exceeds 8.39% of household income in 2024, they may be eligible for Marketplace subsidies, potentially increasing their refund.

Income Factors That Influence Refund Amount

A taxpayer’s refund—or amount owed—depends on income, tax brackets, deductions, and credits. The U.S. tax system is progressive, meaning different portions of income are taxed at different rates. For 2024, federal tax brackets range from 10% to 37%.

The standard deduction reduces taxable income before tax rates apply. In 2024, it is $14,600 for single filers and $29,200 for married couples filing jointly. Taxpayers with deductible expenses exceeding these amounts may choose to itemize, further lowering taxable income. Common itemized deductions include mortgage interest, state and local taxes (capped at $10,000), and medical expenses exceeding 7.5% of adjusted gross income (AGI).

Tax credits directly reduce tax liability. The Earned Income Tax Credit (EITC) benefits low- to moderate-income workers, with refund amounts varying based on income and family size. In 2024, the maximum EITC for a family with three or more children is $7,830. The Child Tax Credit (CTC) provides up to $2,000 per qualifying child, with up to $1,600 refundable. Refundable credits can result in a refund even if no federal income tax was paid.