How the premium tax credit works
The credit is refundable and advanceable: you can take it monthly to lower premiums or claim it at tax time. It's sized off the benchmark silver plan but can be applied to any metal tier — a bronze plan can cost near $0 after subsidy, while gold plans get the same dollar credit.
- • Report income changes mid-year — the credit reconciles on your tax return.
- • Below 100% FPL in non-expansion states you may fall in the coverage gap.
- • An employer offer of 'affordable' coverage disqualifies you from the credit.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
Is there an income limit for ACA subsidies in 2026?
Under current rules, no hard cutoff — anyone whose benchmark premium exceeds 8.5% of household income qualifies for some credit. If the enhanced subsidies lapse, the old 400% FPL cliff returns, so check current law at enrollment.
What income counts toward the subsidy?
Modified adjusted gross income: AGI plus tax-exempt interest, untaxed foreign income, and non-taxable Social Security. Pre-tax 401(k) and HSA contributions reduce it.
What happens if my income rises after I take the credit?
You reconcile on Form 8962 at tax time. If you received too much, you repay part of it (caps apply at lower incomes). If you received too little, you get the difference as a refund.
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