ACA Subsidy / Premium Tax Credit — PTC
A federal tax credit that lowers what you pay for health insurance purchased through the ACA Marketplace.
Official source: healthcare.gov
The ACA Subsidy, also known as the Premium Tax Credit (PTC), helps lower the cost of health insurance for people who buy plans through the ACA Marketplace. To qualify, your household income must be between 100% and 400% of the Federal Poverty Level (FPL). This income cap was raised temporarily through 2025 due to the Inflation Reduction Act.
You can use the subsidy in two ways: it can be applied directly to your monthly premium, which lowers what you pay each month, or you can claim it as a lump sum when you file your taxes.
If your income is below 250% of the FPL, you may also qualify for Cost-Sharing Reductions (CSRs), which help reduce out-of-pocket costs like deductibles and copays.
It is important to update your Marketplace application right away if your income changes during the year. This helps prevent overpaying or underpaying for your health coverage.
In real life
- A person who lost their job can get help paying for health insurance.
- Someone whose income went down can get a lower health insurance payment.
- A family who buys health insurance on the government website can get money back.
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Frequently asked questions about ACA Subsidy / Premium Tax Credit
What is ACA Subsidy / Premium Tax Credit?+
A federal tax credit that lowers what you pay for health insurance purchased through the ACA Marketplace. The credit is calculated based on your household income relative to the Federal Poverty Level. Available to households earning between 100% and 400% FPL (income cap was temporarily lifted through 2025 under the Inflation Reduction Act).
Who qualifies for ACA Subsidy / Premium Tax Credit?+
Anyone without affordable job-based coverage, Medicaid, or Medicare can shop the Marketplace. Subsidies depend on household income.
How do I apply for ACA Subsidy / Premium Tax Credit?+
Apply during Open Enrollment (Nov–Jan) or after a qualifying life event at healthcare.gov, or through your state's Marketplace.
Where can I get help?+
Compare plans and check subsidies at healthcare.gov, or call a free local Navigator listed there. BenefitKarma's free Benefit Eligibility Screener can also tell you if you qualify for Medicaid instead.
Source: healthcare.gov