If you buy health insurance through the Marketplace (HealthCare.gov or your state's exchange), you may qualify for a premium tax credit that lowers your monthly premium. Households with income between 100% and 400% of the federal poverty level may qualify, with the largest credits going to those at the lower end of that range. The amount depends on your income, household size, age, and where you live, so two people in different situations will generally get different amounts.
At a glance
- The premium tax credit is available to people who buy coverage through the Marketplace and meet income and other eligibility requirements.
- Your credit amount is an estimate based on the income you project for the year, and it gets reconciled when you file your federal tax return.
- For 2026 coverage, income above 400% of the federal poverty level generally disqualifies you. Temporary rules that removed this limit expired on December 31, 2025.
What income range qualifies?
Eligibility generally starts at 100% of the federal poverty level (FPL) in most states and generally ends at 400% of FPL. Within that range, the credit phases down as income rises, so a household near the top of the range receives less than one near the bottom.
From 2021 through 2025, temporary rules removed the 400% limit and increased credit amounts at every income level. Those rules expired on December 31, 2025. If you enrolled during those years and are comparing what you paid then to what you are quoted now, that change is the likely reason for the difference.
The FPL changes each year. For reference, 100% FPL for a single person in the 48 contiguous states was $15,060 in 2024, $15,650 in 2025, and $15,960 in 2026. For a family of four, those figures were $31,200, $32,150, and $33,000.
One detail that trips people up: eligibility for a given coverage year is generally measured against the poverty guidelines published the year before. Alaska and Hawaii use separate, higher schedules.
Important: If your income falls below 100% FPL, you may not qualify for the premium tax credit in most states. In states that expanded Medicaid, you would generally qualify for Medicaid instead. In states that did not expand Medicaid, you may fall into a coverage gap where neither Medicaid nor premium tax credits are available. Check your state's specific rules.
Who counts in your household?
Your "household" for premium tax credit purposes is based on who you include on your federal tax return:
- You and your spouse, if you file jointly.
- Your dependents, including children and other qualifying relatives you claim on your tax return.
- Your household size affects both the FPL threshold and the credit amount. A larger household has a higher income threshold for the same percentage of FPL.
The Marketplace uses household income, not just your individual earnings. That includes wages, self-employment income, Social Security benefits, unemployment compensation, and other taxable income for everyone in the tax household.
What about the Medicaid gap?
In states that have not expanded Medicaid, adults with income below 100% FPL may not qualify for either Medicaid or the premium tax credit. This is sometimes called the "coverage gap." If you live in one of these states and your income is very low, you may want to check whether your state has announced any changes to Medicaid eligibility, or explore other options such as community health centers.
How is the credit calculated?
The premium tax credit is based on the difference between:
- The cost of the benchmark Silver plan in your area (the second-lowest-cost Silver plan available to you), and
- The amount you are expected to contribute toward that plan, based on your income as a percentage of FPL.
The lower your income, the less you are expected to contribute, and the larger the credit. The credit amount also changes with the benchmark plan cost in your area, which varies by location, age, and plan year.
You do not have to choose a Silver plan. The credit is calculated based on the Silver benchmark, but you can apply it to any metal tier (Bronze, Silver, Gold, or Platinum) sold through the Marketplace.
Advance credit vs. end-of-year credit
You have two options for receiving the credit:
- Advance premium tax credit (APTC): The estimated credit is applied directly to your monthly premium, lowering what you pay each month. This is what most people choose.
- Claim the full credit at tax time: You pay the full premium during the year and claim the credit when you file your federal tax return.
Either way, the final credit amount is reconciled on your tax return using your actual income for the year.
What can change the amount?
Several things can cause your actual credit to differ from the advance estimate:
- Income changes. A raise, job loss, new freelance income, or a spouse starting work can all shift your household income.
- Household size changes. Having a baby, getting married or divorced, or a dependent aging off your plan.
- Moving to a new area. The benchmark plan cost varies by location.
- Aging. Premiums generally increase with age, which can affect the credit calculation.
Why reporting changes matters
If your income or household changes during the year, report the change to the Marketplace as soon as possible. If you receive more advance credit than you qualify for based on your actual income, you may need to repay some or all of the difference when you file your tax return. (Starting with tax year 2026, that repayment is generally no longer capped.) If you receive less than you qualify for, you will get the difference back as a tax refund.
Keeping your Marketplace application up to date helps avoid surprises at tax time.
What to do next
Primary action: Check my savings to get an estimate of the premium tax credit you may qualify for based on your income, household, and location.
Alternative: Read What is a premium tax credit and how does it lower my monthly cost? to understand how the credit is calculated and applied to your premium.
This article provides general educational information, not legal, tax, or financial advice. Plan availability, pricing, subsidies, and benefits depend on individual circumstances, location, and the current plan year, and may change.
