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).
Can be claimed in advance (applied directly to your monthly premium) or as a lump sum at tax time.
Cost-Sharing Reductions (CSRs) further reduce deductibles and copays for those earning under 250% FPL.
→ If your income changes mid-year, update your Marketplace application immediately to avoid an overpayment.
Also known as
Related terms
- ACA (Affordable Care Act)
A federal law (signed 2010) that expanded access to health insurance by creating the Health Insurance Marketplace, establishing income-based subsidies, and requiring insurers to cover pre-existing conditions.
- Federal Poverty Level
An income measure published annually by the U.S. Department of Health and Human Services (HHS), used to determine eligibility for dozens of federal benefit programs.
- Special Enrollment Period
A window of time outside of the annual Open Enrollment Period during which individuals can enroll in or change ACA Marketplace health insurance coverage following a qualifying life event.
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Frequently asked questions about ACA Subsidy / Premium Tax Credit
What is an ACA Subsidy / Premium Tax Credit?+
An ACA Subsidy, or Premium Tax Credit, is money the government gives to help you pay for health insurance. You get this credit if you buy your health insurance through the Affordable Care Act (ACA) Marketplace. It makes your monthly payments lower so health coverage is more affordable.
Who can get an ACA Subsidy?+
You can get an ACA Subsidy if your household income falls within a certain range compared to the Federal Poverty Level. This income limit changes each year. Generally, people with lower incomes are able to get more help with their health insurance costs.
How do I apply for a Premium Tax Credit?+
To get a Premium Tax Credit, you need to apply for health insurance through the ACA Marketplace website. When you fill out your application, you will provide information about your household income. The Marketplace will then tell you if you can get a subsidy and how much it will be.
How much can the ACA Subsidy save me?+
The amount you save with an ACA Subsidy depends on your income and the cost of health plans where you live. The credit helps cover a portion of your monthly insurance payment. The less you earn, the more help you are likely to get to make health insurance affordable.