The Premium Tax Credit (PTC) is a refundable tax credit that helps eligible individuals and families afford health insurance purchased through the Health Insurance Marketplace. If you have health insurance through HealthCare.gov or your state's Marketplace, you may qualify for this credit.
The amount of the credit is based on a sliding scale that considers your household income, family size, and the cost of coverage in your area. In general, households with lower incomes qualify for a larger credit, while households with higher incomes qualify for a smaller credit.
If you claim the Premium Tax Credit, you must file a federal income tax return.
Who Is Eligible for the Premium Tax Credit?
You may qualify for the Premium Tax Credit if you:
- Purchase health insurance through the Marketplace.
- Are not eligible for certain other health coverage, such as Medicare, Medicaid, or qualifying employer-sponsored coverage.
- Meet the Marketplace eligibility requirements for the credit.
- Are not claimed as a dependent on another person's tax return.
- Do not file a Married Filing Separately tax return unless you qualify for a limited exception.
If you enroll in an employer-sponsored health plan, including retiree coverage, you generally aren't eligible for the Premium Tax Credit.
Income Requirements
Your eligibility and credit amount are based on your household income and family size.
While the Federal Poverty Level (FPL) is still used when calculating the Premium Tax Credit, eligibility is no longer strictly limited to taxpayers with household income between 100% and 400% of the FPL. Depending on your circumstances and the cost of available health coverage, you may be eligible for a Premium Tax Credit even if your income exceeds 400% of the FPL.
Federal Poverty Guidelines
The Premium Tax Credit uses Federal Poverty Guidelines (FPL) as part of the eligibility and calculation process. The Marketplace uses the applicable poverty guidelines available during enrollment to estimate your Premium Tax Credit.
| Family Size | 2025 FPL | 2026 FPL |
| 1 | $15,650 | $15,950 |
| 2 | $21,150 | $21,550 |
| 3 | $26,650 | $27,150 |
| 4 | $32,150 | $32,750 |
| 5 | $37,650 | $38,350 |
| 6 | $43,150 | $43,950 |
| 7 | $48,650 | $49,550 |
| 8 | $54,150 | $55,150 |
| 9+ | Add $5,500 for each additional person | Add $5,600 for each additional person |
Important: Eligibility for the Premium Tax Credit is not based solely on whether your household income falls between 100% and 400% of the Federal Poverty Level. Depending on current law and the cost of available health coverage, taxpayers with income above 400% of the FPL may still qualify for a Premium Tax Credit. Always enter your Form 1095-A information so the program can calculate the correct credit amount.
Individuals who meet the eligibility requirements must also satisfy all other Marketplace rules for the credit.
Report Changes to the Marketplace
It's important to report changes in income, family size, marital status, or other household information to the Marketplace as soon as they occur.
If you receive advance Premium Tax Credit payments and your circumstances change during the year, the amount paid to your insurance company may not match the credit you're ultimately entitled to claim on your tax return. This could result in:
- A smaller refund than expected, or
- Additional tax owed when you file your return.
How Can I Receive the Premium Tax Credit?
If you're eligible for the Premium Tax Credit, you can choose one of two options.
Take the Credit Now
You can have all or part of the credit paid directly to your insurance company throughout the year to help lower your monthly premium. These payments are called Advance Premium Tax Credit (APTC) payments.
When you file your tax return, you'll reconcile the advance payments with the credit you're actually entitled to receive based on your final income and household information.
Take the Credit Later
You can choose not to receive advance payments and instead claim the entire Premium Tax Credit when you file your federal income tax return.
The credit may increase your refund or reduce the amount of tax you owe.
How Do I Enter Form 1095-A in the Program?
If you purchased health insurance through the Marketplace, you'll receive Form 1095-A, Health Insurance Marketplace Statement.
In the program:
- Select Health Insurance.
- Answer Yes when asked if you purchased insurance through HealthCare.gov or a state Marketplace.
- Answer Yes when asked if you received Form 1095-A.
- Enter the information exactly as it appears on the form.
The program will complete Form 8962, Premium Tax Credit, and determine whether:
- You're entitled to an additional credit,
- You must repay a portion of advance payments received, or
- Your advance payments match the credit allowed.
2026 Filing-Year Guidance
For tax year 2026 returns filed in 2027:
- If you received a Form 1095-A, you must enter the form information on your tax return.
- If advance Premium Tax Credit payments were made on your behalf during 2026, you generally must reconcile those payments on Form 8962.
- Filing a return without reconciling advance payments may delay processing of your return and could affect future eligibility for advance Premium Tax Credit payments.
- Keep records of any Marketplace notices, changes in income, and household changes throughout the year to help ensure accurate reporting.
How Do I Claim the Premium Tax Credit?
The Marketplace generally sends Form 1095-A by the end of January following the coverage year.
For 2026 Marketplace coverage, you should receive Form 1095-A in early 2027. You'll use the information from this form to calculate and claim your Premium Tax Credit on your 2026 federal tax return.
Do not file your tax return until you receive Form 1095-A. Filing before you receive the form could delay processing or require corrections later.
Key Takeaway
The Premium Tax Credit can significantly reduce the cost of Marketplace health insurance. Whether you receive the credit in advance or claim it when you file your return, make sure your Marketplace information stays up to date and enter your Form 1095-A accurately. This helps ensure you receive the correct credit amount and avoid unexpected tax bills when filing your 2026 return.