Filers who report health premium credits are juicy audit targets.
I have a client who graduated college and started his career, his return was audited because he got insurance coverage under his parent’s exchange policy. But he had no premium coverage listed on his return, it was reported properly on his parents return. We are still awaiting a response in these slow post Covid times.
The premium credit is available for eligible individuals with certain incomes who buy health insurance through one of the exchanges and qualify for subsidies. Individuals who are eligible for Medicare or other federal insurance do not qualify.
Nor do people who can get affordable health coverage through their employer. Here’s an example in which a taxpayer claimed erroneous premium credits.
After a man lost his job, he enrolled in COBRA continuation health coverage for himself and his family through his employer. He later terminated that insurance and purchased coverage through an exchange. He is entitled to the premium credit for a portion of his cost of coverage from the exchange. But his cost of COBRA coverage from his former employer’s health plan is not credit-eligible
Sek, TC Memo. 2022-87