How much can I earn and qualify for premium tax credits in the Marketplace? | KFF (2024)

FAQs

How much can I earn and qualify for premium tax credits in the Marketplace? | KFF? ›

Premium tax credits are available to individuals and families with incomes between 100 percent of the federal poverty line ($23,550 for a family of four) and 400 percent of the federal poverty line ($94,200 for a family of four) who purchase coverage in the health insurance marketplace in their state.

To be eligible for the premium tax credit, your household income must be at least 100 percent and, for years other than 2021 and 2022, no more than 400 percent of the federal poverty line for your family size, although there are two exceptions for individuals with household income below 100 percent of the applicable ...

For Marketplace coverage in 2024, the poverty level used is $14,580 for a single adult and $30,000 for a family of 4.

Calculation of the Federal Advance Premium Tax Credit

The APTC equals the difference between (1) the cost of the “second-lowest cost silver plan” available to you (based on your age, family size, and county of residence) and (2) the maximum amount you are expected to pay towards your health insurance premiums.

If you enroll in an employer-sponsored plan, including retiree coverage, that is minimum essential coverage you are not eligible for the Premium Tax Credit for your Marketplace coverage, even if the employer plan is unaffordable or fails to provide minimum value.

Your tax credit is based on the income estimate and household information you put on your Marketplace application. Income between 100% and 400% FPL: If your income is in this range, in all states you qualify for premium tax credits that lower your monthly premium for a Marketplace health insurance plan.

Projected annual income (for the coverage year) is always used to Marketplace (APTC and CSR) eligibility. The Marketplace counts income for the primary applicant, their spouse if they have one, and everyone they'll claim as a tax dependent on their federal income tax return (if the dependents are required to file).

They will inquire about your tax return from the IRS and other databases. If you underestimated your income for that year and received a subsidy, you will need to pay the entire subsidy back the next time you file your taxes. You must report income changes to Covered California within 30 days.

Avoiding or Reducing Premium Tax Credit Repayments

The key to reducing the amount of premium tax credits you have to repay is keeping your household income below 400% of the federal poverty level. As long as your income is below this level, your repayments are capped.

The income range is $30,000 to $120,000 in 2024 for a family of four. (Income limits may be higher in Alaska and Hawaii because the federal poverty level is higher in those states.) The American Rescue Plan Act of 2021 also extended subsidy eligibility to some people earning more than 400% of the federal poverty level.

How do I know if I had premium tax credit? ›

If you had a Marketplace plan with the premium tax credit. You should get your 1095-A form by mail no later than mid-February. It may be available in your Marketplace account as soon as mid-January.

In addition, you may have to pay back some or all of the advance credit payments made on behalf of you or an individual in your tax family. Advance payments of the premium tax credit are reviewed in the fall by the Marketplace for the next calendar year as part of their annual enrollment process.

Accounting method

The accounting method takes the number of days since the beginning of an insurance contract and multiplies the figure by the premium earned each day. It is the most common method for calculating earned premium and accurately reflects the amounts insurance companies made on specific contracts.

If you use more of the PTC than your final taxable income allows, you may need to repay the difference when you file your taxes, but if you use less than you qualify for, you may receive the difference as a refundable credit on your return.

If your income estimate goes up or you lose a household member — You may qualify for less savings than you're getting now. If you don't report the change, you could have to pay money back when you file your federal tax return. The amount you pay for your health insurance every month.

Health insurance premiums are deductible if you itemize your tax return. Whether you can deduct health insurance premiums from your tax return also depends on when and how you pay your premiums: If you pay for health insurance before taxes are taken out of your check, you can't deduct your health insurance premiums.

The income range is $30,000 to $120,000 in 2024 for a family of four. (Income limits may be higher in Alaska and Hawaii because the federal poverty level is higher in those states.) The American Rescue Plan Act of 2021 also extended subsidy eligibility to some people earning more than 400% of the federal poverty level.

Premium tax credits are available to people who buy Marketplace coverage and whose income is at least as high as the federal poverty level. For an individual, that means an income of at least $14,580 in 2024. For a family of four, that means an income of at least $30,000 in 2024.

If you choose not to get advance credit payments, the full amount of the premium tax credit you are allowed will lower the amount of tax you owe for the year, or increase your refund to the extent your premium tax credit is more than the amount of tax you owe.