The Premium Tax Credit is a refundable credit designed to assist eligible individuals and families afford health insurance purchased through the Marketplace. If you get your health insurance coverage through the Marketplace, you may be eligible for the Premium Tax Credit.
The estimated credit is based on a sliding scale using income and family information collected during open enrollment through the Marketplace. Individuals having lower incomes get a larger credit to help cover the cost of their insurance. In other words, the higher your income, the lower the amount of your credit.
If you claim the Premium Tax Credit, you must file a federal income tax return.
How do I know if I am eligible to claim the Premium Tax Credit?
Individuals may be eligible if they:
- Buy health insurance through the Marketplace
- Are not eligible for other qualifying coverage, such as government-sponsored or certain employer-sponsored coverage
- Are within certain income limits
- Do not file a Married Filing Separately tax return
- Cannot be claimed as a dependent by another person
If you enroll in an employer-sponsored plan, including retiree coverage, you are not eligible for the premium tax credit even if the plan is unaffordable or fails to provide minimum value.
Income Limits:
Individuals and families whose income for the year is between 100% and 400% of the Federal Poverty Line (FPL) for their family size, may be eligible for the Premium Tax Credit.
The 2023 Federal Poverty Line amounts are as follows:
| Individuals | $14,580 |
| Family of 2 | $19,720 |
| Family of 3 | $24,860 |
| Family of 4 | $30,000 |
| Family of 5 | $35,140 |
| Family of 6 | $40,280 |
| Family of 7 | $45,420 |
| Family of 8 | $50,560 |
The 2022 Federal Poverty Line amounts are as follows:
| Individuals | $13,590 |
| Family of 2 | $18,310 |
| Family of 3 | $23,030 |
| Family of 4 | $27,750 |
| Family of 5 | $32,470 |
| Family of 6 | $37,190 |
| Family of 7 | $41,910 |
| Family of 8 | $46,630 |
The 2021 Federal Poverty Line amounts are as follows:
| Individuals | $12,880 |
| Family of 2 | $17,420 |
| Family of 3 | $21,960 |
| Family of 4 | $26,500 |
| Family of 5 | $31,040 |
| Family of 6 | $35,580 |
| Family of 7 | $40,120 |
| Family of 8 | $44,660 |
The 2020 Federal Poverty Line amounts are as follows:
| Individuals | $12,760 |
| Family of 2 | $17,240 |
| Family of 3 | $21,720 |
| Family of 4 | $26,200 |
| Family of 5 | $30,680 |
| Family of 6 | $35,160 |
| Family of 7 | $39,640 |
| Family of 8 | $44,120 |
Individuals who meet these income requirements must also meet the other eligibility requirements.
Report all changes in circumstances, such as income and family size, to the Marketplace when they occur. If you fail to report the changes to the Marketplace as they occur, the advance payments may not match your actual credit amount resulting in a smaller refund or even a balance due on your return.
If you are eligible for the Premium Tax Credit, you can choose to:
- Take the credit now- have all or some of the credit paid directly to your insurance company to help pay your monthly premiums
- Take the credit later- wait until you file your taxes and claim the entire credit on your return.
If you choose to take the credit now, enter the information received on Form 1095-A, from the Marketplace. In the program, click on Health Insurance and when asked, please answer, "Yes" that you purchased insurance through HealthCare.gov or through your state Marketplace.
Then when you are asked if you received Form 1095-A, please answer, "Yes" and enter the information from the form. The program will calculate whether you will have to pay back (increase your tax owed) or get a refund (decrease your tax owed) based on the information entered.
If you choose to take the credit later, the full amount of the credit will be claimed on your tax return. Follow the same instructions listed above for entering information from Form 1095-A. This will either increase your refund (if you have a refund) or decrease the amount you owe on your return.
How do I Claim the Credit?
The Marketplace will send you a statement (Form 1095-A) showing the amount of your premiums and advance credit payments about January 31 of the year following the year of coverage. For example, you will receive the 2022 information statement by mid February, 2023, and can use this information to compute your premium tax credit on your 2022 tax return.
Please do not file your tax return until you have Form 1095-A to complete your premium tax credit information.