I’m an F1 student and was misinformed about premium tax credit eligibility. Marketplace showed I qualify. How do I repay

Question

I was misinformed by an insurance agent that I qualified for a premium tax credit in the marketplace, and the marketplace also showed I was eligible. However, I later learned I am not eligible. How can I resolve this and correct my eligibility status? Should I contact the marketplace or IRS to address this error and avoid penalties during tax filing? How would repaying the excess affect my current coverage, premium payments, and immigration status as an F1 student? Please advise on how to get out of this situation and ensure my records are accurate.

James L. Arrasmith · Answer

You'll need to take prompt action to address this premium tax credit situation. Contact the Marketplace immediately to report that you're not eligible as an F1 student - this helps establish good faith effort to correct the error and may help reduce any penalties. 
 
For the tax credit amounts already received, you'll need to repay them when filing your taxes using Form 8962. Don't worry - this repayment obligation won't affect your immigration status or F1 standing, as it's considered a technical correction rather than a violation. Your current health coverage will continue, though your monthly premiums will increase to the full amount without the tax credit. 
 
To prevent future issues, update your Marketplace application to show your correct immigration status and request termination of the premium tax credit going forward. You might consider working with a tax preparer who has experience with international student tax matters to ensure everything is properly documented and reported. Remember to keep copies of all communications and corrections for your records.

Q: I’m an F1 student and was misinformed about premium tax credit eligibility. Marketplace showed I qualify. How do I repay