The Advance Premium Tax Credit (APTC) is a federal tax credit helping individuals lower their monthly health insurance premiums purchased through the marketplace. The APTC is calculated and directly provided to insurance companies by the Federal Government. The credit amount is based on individual income.
The Advanced Premium Tax Credit, often colloquially known under the Patient Protection and Affordable Care Act (ACA), differs from regular tax credits. Unlike traditional credits, these are calculated to offset the taxpayer’s liability and are refunded to reduce the previous year’s tax liability. The credit payments are then calculated and sent directly to health insurance companies covering individuals eligible for the credit.
How Premium Tax Credit Works?
Your tax credits are determined based on your income estimate and household information provided in your marketplace application. These credits apply to incomes between 100% and 400% of the federal poverty level. If your income falls within this range and qualifies for a Premium Tax Credit (PTC) marketplace health insurance plan, you can enroll through a special enrollment period.
For those whose income exceeds 400% of the federal poverty level, there’s still an opportunity to qualify for PTC with a lower monthly premium health insurance plan. The health insurance marketplace simplifies the process of exploring private health insurance options and offers assistance with premiums. The Federal Department for Health and Human Services oversees additional requirements for health plans.
PTC Eligibility