The Premium Tax Credit
The premium tax credit is a tax credit established by the Affordable Care Act. If you get your health insurance coverage through a state or the federal Health Insurance Marketplace you may be eligible. The credit can help make health insurance more affordable to you and your family.
In general, you may be eligible for the credit if:
- You enroll in a qualified health plan through the Marketplace for a member of your family (you, your spouse or your dependents),
- For the same months your enrolled in Marketplace coverage, one or more of the enrolled family members is ineligible for other coverage - such as through an employer or government plan,
- Your household income is at least 100% and no more than 400% of the Federal poverty line for your family size,
- If you are married, you file a joint return with your spouse. However, if you are a victim of domestic violence or spousal abandonment, you may be able to file as married filing separate, and
- You cannot be claimed as a dependent by another person.
A qualified health plan is a health insurance plan or policy purchased through a Marketplace at the Bronze, Silver, Gold, or Platinum level.
Catastrophic plans don't meet the requirements for qualified health plans under the rules for the premium tax credit. If you enrolled in a Catastrophic plan, you won't qualify for the credit.
Premiums for insurance depend, in part, on where you live. The credit is based on the second lowest cost Silver level plan where the enrolled family member (or members) live who are not eligible for other health coverage.
Your household income must be between 100% and 400% of the federal poverty line for your family size.
Household income is your modified adjusted gross income (MAGI) and the MAGI of your spouse if you file a joint return, plus the MAGI of your dependents who are required to file a federal tax return.
Modified adjusted gross income is the adjusted gross income as reported on Form 1040 plus any foreign earned income exclusion, nontaxable Social Security benefits (including tier 1 railroad retirement benefits), and tax-exempt interest. It does not include Supplemental Security Income (SSI).