Health insurance can be inaccessible for many Americans due to its price. Strategies have been introduced to lower costs for those who are unable to afford high healthcare premiums, one of which is a premium tax credit.
Premium tax credits (PTCs) are a type of sliding scale subsidy that reduces the amount you pay monthly for individual or family health plans purchased through the Marketplace. The American Rescue Plan Act of 2021 was signed by President Biden on March 11, 2021, and allowed, for the first time, individuals with annual income 400% above the Federal Poverty Level (FPL) to be eligible for a PTC. States such as California, Massachusetts, New Jersey, and Vermont have enacted state-level subsidies that help out specific populations, too. Currently, the expansion will last until 2025. To be eligible, you must be enrolled through a Marketplace plan, have U.S. citizenship or legal residency, file federal income tax returns, and must not qualify for other programs such as Medicaid and Medicare. Additionally, you must not be eligible for an employee plan that offers minimum essential coverage.
There are two ways you can claim this credit:
For the Marketplace, a household consists of the tax filer, their spouse if they have one, and their tax dependents if they have any.
When determining who to include in your household, follow these guidelines:
Visit this link to see the limited exceptions to these basic rules