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.
2021 & 2022 Eligibility
Maximum household income limits have been eliminated. Previously, household income of 400% or more of the federal poverty line made a taxpayer ineligible for any Premium Tax Credit.
In 2021 and 2022, income above 400% of the federal poverty line may be eligible for some 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 on the 2021 return.
The American Rescue Plan has special rules for taxpayers that receive unemployment income in 2021 ONLY. If someone receives, or is eligible to receive, unemployment benefits during 2021, their household income will be treated as no higher than 133% of the Federal Poverty Level for figuring the Premium Tax Credit.