How Form 1095-A (Marketplace) Affects Your Taxes Based on Income and Filing Separately. A Brief Explanation

Form 1095-A is a document sent to you by the Marketplace (HealthCare.gov or your state version) if you had subsidized health insurance during the year.

This form shows how much the government paid for your insurance (subsidy or “Advance Premium Tax Credit - APTC") and how much you should have actually received based on your income.

If there was a difference between what you were advanced and what you actually owed, it is adjusted on your tax return using:

Form 8962 – Premium Tax Credit (PTC)

Here's how to reconcile the credit:

If you received more subsidy than you were entitled to → you must return some or all of that money on your tax return.
If you received less, you can receive an additional credit.

What happens if you are married but file separately?

This is the most critical point and the one that has the greatest impact on your taxes. In the vast majority of cases:

You CANNOT claim the credit (neither receive it nor reconcile it) if you are "Married Filing Separately (MFS)"

This means:

You cannot get rid of that credit (over-subsidized).
You cannot apply exceptions or receive the extra credit, even if you are entitled to it.

So… if you are married, and:

You earn less and you were the one who had the subsidized Marketplace insurance, but your spouse earns much more and you file separately,
The IRS does not allow you to adjust or forgive that subsidy received…
You must repay the entire APTC received in the year. And that increases your tax bill (the amount you must pay).

Realistic Example:

You earned $25,000 and received a $400 monthly subsidy for your Marketplace health insurance.
The total subsidy received for the year was $4,800.
But if you file separately, the IRS requires you to repay the full $4,800 (even though your income may have meant you were entitled to most of the credit).

Even if you're not at fault, the IRS views this as an automatic rule.

Are there any exceptions?

Yes, but they're very limited. The IRS only allows reconciliation if you file separately due to domestic abuse or abandonment. And that must be carefully documented. If you don't qualify for that exception: It's time to pay.