Health Insurance
Premium Tax Credit
The premium tax credit (PTC) makes marketplace coverage affordable by offsetting a portion of your monthly premium based on your income and the cost of the benchmark Silver plan.
Last reviewed: May 2026 · Editorial methodology
Definition
The Premium Tax Credit (PTC) is a refundable federal tax credit available to individuals and families who purchase health insurance through the ACA marketplace and whose household income falls within the eligible range. Historically limited to those earning between 100% and 400% of the federal poverty level (FPL), the Inflation Reduction Act extended eligibility to households above 400% FPL through provisions carried into 2026 — meaning no enrollee pays more than 8.5% of their household income for the benchmark Silver plan regardless of income. Credits can be taken in advance as Advanced Premium Tax Credits (APTC), reducing monthly premiums directly, or claimed on your federal tax return. Credit amounts are calculated based on the difference between the cost of the second-lowest-cost Silver plan in your area and your expected contribution (a percentage of your income set by federal tables). If your actual income differs significantly from estimates, you may owe back some or all of the advance credit, or receive a larger refund, at tax time. Accurate income reporting to the marketplace throughout the year is essential to avoid reconciliation surprises.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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