Premium tax credits reduce your premium for most Marketplace policies. The amount of the tax credit you may receive depends on your income and the cost of Marketplace health plans in your area.

The Marketplace will determine the expected contribution you are required to pay toward the premium for a mid-range (Silver) benchmark plan. The expected contribution will increase on a sliding scale based on your 2025 income, with more financial assistance for enrollees with lower incomes and less for those with higher incomes. If your income is between $15,060 and $22,590 in 2025 (100%-150% FPL for a single adult), the benchmark Silver plan will cost you $0. If your income reaches $60,240 (400% FPL for a single adult) or higher, you would be required to pay 8.5% of your income toward the benchmark plan.

The difference between the premium for the benchmark plan and your expected contribution equals the amount of your tax credit. (You do not have to pay more than the actual premium for the plan.) You can use that amount to help pay the premium for any Bronze, Silver, Gold, or Platinum plan offered in the Marketplace. The credit cannot be used to pay for a Catastrophic plan.

Premium tax credits may be claimed at the end of the year, or you can apply for an advanced premium tax credit based on your estimated income for the up-coming year. If you elect to receive an advanced credit, the government will pay the credit directly to your insurance company each month and the insurer will bill you for the rest of the premium.

If you do not know for sure what your income for the coverage year will be when you apply, provide your best estimate. Later, when you file your tax return, the IRS will compare your actual income to the amount of premium tax credit you claimed in advance. If you underestimated your income and claimed too much premium tax credit, you might have to pay back some or all of the difference. If you didn’t receive all of the premium tax credit you were entitled to during the year, you can claim the difference when you file your tax return. Report any changes in your income during the year to the Marketplace, so your credit can be adjusted and you can avoid any significant repayments at the end of the year.