Premium tax credits may lower the monthly cost of a health plan you buy through the ACA Marketplace.
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What are ACA Marketplace Premium Tax Credits?
ACA Marketplace Premium Tax Credits are federal tax credits that lower the price you pay for health insurance each month. You can use them to reduce your monthly premium on a plan from the Health Insurance Marketplace (also called the ACA Marketplace).
These credits are separate from your regular tax refund. They work by giving you advance payments directly to your insurance company so you pay less out of your pocket every month.
Who qualifies
You may qualify if:
You are a U.S. citizen or lawfully present immigrant
Your household income falls within certain limits based on the federal poverty guideline for your state and family size
You are not eligible for affordable coverage through an employer
You are not covered by Medicare, Medicaid, or another government program
Income limits vary by family size and state. Your eligibility is based on your expected income for the year you want coverage, not what you earned last year.
How much you can get
The amount you save depends on your household income and the cost of health plans in your area. Lower income generally means larger credits.
You report your expected income when you apply. If your actual income turns out to be different at tax time, you may owe money back or get additional credits on your tax return.
How to apply
Step 1: Find your Marketplace
Some states run their own Marketplace website. In other states, you apply through HealthCare.gov. Your state page will show you where to apply:
Information about any current health coverage you or your family members have
Immigration documents if you are not a U.S. citizen
Step 3: Create an account and apply
You will create a login account on your Marketplace website. Then you will fill out an application with information about your household, income, and citizenship status.
The application will ask you to estimate your household income for the year you want coverage. Be as accurate as you can. This estimate determines how much you can save.
Step 4: Choose a plan
After you are approved for credits, you will see how much they will reduce your monthly cost. Then you pick a health plan. Your credit applies automatically to lower your premium each month.
Documents you may need
Social Security card or number
Proof of U.S. citizenship or lawful immigration status
Pay stubs or tax returns to show your expected income
Information about any employer coverage offered to you
Current health insurance information if you have coverage now
The Marketplace may ask to verify information you provide. If so, you will be told what documents to send.
What happens after you apply
You usually find out within a few days to a couple of weeks whether you qualify. The Marketplace will send you a notice explaining your eligibility and what credits you got approved for.
If you are approved, your credits start when your coverage begins. You do not pay them back upfront. Instead, they are applied to your monthly premium.
If you are not approved, the notice will explain why. You may be able to appeal the decision or reapply with new information.
Renewing your coverage
You will need to renew your enrollment each year. Open Enrollment for 2027 coverage starts November 1.
When you renew, update any information that changed, especially your expected income. Reporting accurate income helps you get the right amount of credits and avoids surprises at tax time.
If you do not actively renew before the deadline, your coverage may end.
What happens at tax time
The credits you received during the year are reconciled when you file your taxes. Your actual household income for the year is compared to what you estimated.
If you earned less than you estimated, you may get extra credits as a refund.
If you earned more than you estimated, you may owe some credits back when you file.
This is why reporting accurate income matters. If you think your income will change during the year, you can update your application in the Marketplace.
Related help
If you need help understanding your options or finding other assistance:
Visit HealthCare.gov for more information about coverage choices
Use our benefits screener to see what other programs you might qualify for
Check our glossary for definitions of health insurance terms
Contact the Marketplace for help with your application
Applying for ACA Marketplace Premium Tax Credits is free. Only the Marketplace decides whether you qualify based on your income and other factors.
Benefits Research Desk · Sep 18, 2026 · 4 min read
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