Premium Tax Credit
A tax credit you can use to lower your monthly insurance payment (called your “premium”) when you enroll in a plan through the Health Insurance Marketplace. Your tax credit is based on the income estimate and household information you put on your Marketplace application.
If your estimated income falls between 100% and 400% of the federal poverty level for your household size, you qualify for a premium tax credit.
You can use all, some, or none of your premium tax credit in advance to lower your monthly premium.
- - If you use more advance payments of the tax credit than you qualify for based on your final yearly income, you may have to repay the difference when you file your federal income tax return.
- - If you use less premium tax credit than you qualify for, you may get the difference as a refundable credit when you file your taxes.
You can buy health insurance through other sources, but the only way to get a premium tax credit is through the Health Insurance Marketplace.
Premium Tax Credit and Cost-Sharing Reductions (Subsidy)
Individuals enrolled through an Exchange may be eligible for a Advance Premium Tax Credit and Cost-sharing reductions
Advance Premium Tax Credit:
When you buy health insurance coverage in the Marketplace, you may be able to get a premium tax credit that lowers what you pay in monthly premiums. This will depend on your household size and income.
When you apply for coverage in the Marketplace, you'll learn if you’re eligible for savings on out-of-pocket costs. Whether you qualify to save on out-of-pocket costs will depend on your household size and income.
- - Out-of-pocket savings apply only to Silver plans.
When you enroll in coverage through the Marketplace, you may be able to save money on out-of-pocket costs, including deductibles, copayments, and coinsurance. This is sometimes called “cost-sharing reductions.” The Marketplace cost-sharing reduction lowers the amount you have to pay for out-of-pocket costs like deductibles, coinsurance, and copayments.