2021 Subsidy Reconciliation


Taxpayers who received California Premium Assistance Subsidy (subsidies) for health coverage in 2021 may have to pay back some or all of the amount received when filing their 2021 tax return. The California Health Insurance Marketplace Statement (FTB 3895) from Covered California shows how much California subsidy you received.

On March 11, 2021, the American Rescue Plan Act (ARPA) increased the amount of federal financial help available to taxpayers for all of 2021. By receiving additional federal subsidies, many taxpayers no longer qualify for the state subsidy they received and therefore must pay this amount back with their tax return.

How to Reconcile Subsidies

Taxpayers must reconcile their California subsidies on Premium Assistance Subsidy (FTB 3849) when filing their 2021 tax returns. Taxpayers who received California subsidies will receive a FTB 3895 form from Covered California in January 2022. The FTB 3895 form will provide the information needed for subsidy reconciliation.

Calculate Pay Back

Taxpayers can use the FTB 3849 form to determine how much California Premium Assistance Subsidy they will need to pay back with their tax return.

This reconciliation will apply only to taxpayers who received California subsidies. Covered California will issue a FTB 3895 form to California subsidy recipients.

Assistance Repaying California Subsidies

If you have a balance due on your state tax return and cannot pay in full, you can request repayment assistance through options available on the If You Cannot Pay page.

You must first file your return and receive a bill for the balance due to enter into a payment plan (installment agreement).