2021 Health Care Mandate Subsidy Reconciliation Public Service Bulletin

January 14, 2022

Purpose of bulletin

To inform taxpayers and the department that taxpayers who received CA Premium Assistance Subsidy (PAS) for health care coverage for 2021 may have to pay back some or all of the amount received when filing their 2021 CA tax return.

Background

• On March 11, 2021, the American Rescue Plan Act increased the amount of federal Premium Tax Credit for taxpayers for all of 2021.
• This additional federal financial assistance was available to CA taxpayers, retroactive to January 1, 2021, and replaced state subsidies taxpayers were getting.
• Covered CA paid CA PAS for taxpayer(s) health care coverage from January through April 2021.
• Effective May 2021, Covered CA prorated the increased federal Premium Tax Credit for all of 2021 over the months of May through December.
• This resulted in an over-allowance of CA PAS.
• Taxpayers who received CA PAS from Covered CA will receive the California Health Insurance Marketplace Statement (FTB 3895).
• Taxpayers must reconcile their CA PAS received on Premium Assistance Subsidy (FTB 3849) when filing their 2021 tax return.
• All taxpayers who received CA PAS must file a tax return regardless of filing requirement thresholds.
• If the taxpayer’s subsidy reconciliation results in a balance due, they can contact FTB to request repayment assistance after filing their tax return and receive a bill for the balance due. Options are available on the “If You Cannot Pay” web page on the ftb.ca.gov website.

Additional information

For additional information go to the FTB Subsidy Reconciliation page.