Glossary
Premium tax credit
Money from the federal government that lowers what you pay each month for health insurance bought through the ACA Marketplace.
A premium tax credit reduces the cost of your monthly health insurance payment. You get it when you buy a plan through the ACA (Affordable Care Act) Marketplace, also called HealthCare.gov.
The amount you get depends on your income, family size and the cost of plans in your area. If you qualify, the credit goes directly to your insurance company to lower your monthly bill. You don't have to wait until tax time.
To get a premium tax credit, you must:
- Buy a plan through the ACA Marketplace (not from an insurance company directly)
- Be a U.S. citizen or lawfully present immigrant
- Not qualify for other affordable coverage, like through an employer
- Have income between about 100% and 400% of the federal poverty level (rules vary by state)
Applying is free. Only the government decides if you qualify. You can apply anytime at HealthCare.gov.
Programs where this matters
MedicaidCenters for Medicare & Medicaid ServicesMedicaid is free or low-cost health coverage run by each state with federal funding, for children, adults, pregnant people, older adults and people with disabilities.ACA SubsidiesCenters for Medicare & Medicaid ServicesPremium tax credits may lower the monthly cost of a health plan you buy through the ACA Marketplace.CHIPCenters for Medicare & Medicaid ServicesCHIP gives low-cost health coverage to uninsured children in families that earn too much for Medicaid.