The premium tax credit – also known as PTC – is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace.
You are eligible for the premium tax credit if you meet all of the following requirements. You:
- Have household income that falls within a certain range.
- Do not file a tax return using the filing status of Married Filing Separately.
- There is an exception to this rule that allows certain victims of domestic abuse and spousal abandonment to claim the credit using Married Filing Separately
- Cannot be claimed as a dependent by another person.
- Meet these additional requirements: In the same month, you or a family member:
- Have health insurance coverage through a Health Insurance Marketplace.
- Are not able to get affordable coverage through an eligible employer-sponsored plan that provides minimum value.
- Are not eligible for coverage through a government program, like Medicaid, Medicare, CHIP or TRICARE.
- Pay the share of premiums not covered by advance credit payments.
Starting tax year 2023: New employer-coverage affordability rule for family members of employees. For purposes of determining eligibility for the PTC, affordability of employer coverage for an employee’s spouse or dependents allowed to enroll in the employer coverage is no longer based on the cost of covering only the employee. Affordability of the employer coverage for these family members is now based on the employee’s cost for coverage of the employee and these other family members.
For tax years 2023 through 2025, taxpayers with household income that exceeds 400% of the federal poverty line for their family size may be allowed a Premium Tax Credit.
The American Rescue Plan Act of 2021, enacted on March 11, 2021, suspended the requirement to repay excess advance payments of the premium tax credit (excess APTC) for tax year 2020 ONLY. Repayment amounts will no longer be suspended.