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Eligibility for the Premium Tax Credit

Eligibility for the Premium Tax Credit

You may be allowed a premium tax credit if:

  • You or a tax family member enrolled in health insurance coverage through the Marketplace for at least one month of a calendar year in which he or she was not eligible for affordable coverage through an eligible employer-sponsored plan that provides minimum value or eligible to enroll in government health coverage –  like Medicare, Medicaid, or TRICARE
  • Your health insurance premiums for at least one of those same months are paid by the original due date of your return. They can be paid either through advance credit payments, by you, or by someone else
  • You are within certain income limits
  • You do not file a married filing separately tax return
  • You cannot be claimed as a dependent by another person

You are not eligible for the premium tax credit for coverage purchased outside the Marketplace. Answer the yes-or-no questions in our eligibility chart or use the “Am I Eligible to Claim the Premium Tax Credit” interview tool to see if you may qualify for the premium tax credit.

Income Criteria

To be eligible for the premium tax credit, your household income must be at least 100 – but 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 federal poverty line. Remember that simply meeting the income requirements does not mean you’re eligible for the premium tax credit. You must also meet the other eligibility criteria. 

For information about the two exceptions for individuals with household income below 100 percent of the federal poverty line, see the instructions to Form 8962.

Here are four things to remember about how your income affects your premium tax credit:

  • The amount of the premium tax credit is based on a sliding scale, with greater credit amounts available to those with lower incomes. 
  • If the advance credit payments made on your behalf are more than the allowed premium tax credit, you will have to repay some or all the excess. If your household income is 400 percent or more of the federal poverty line for your family size, you will have to repay all of your excess advance credit payments. 
  • If your projected household income is close to the 400 percent upper limit, be sure to carefully consider the amount of advance credit payments you choose to have paid on your behalf. 
  • If your household income on your tax return is more than 400 percent of the federal poverty line for your family size, you are not allowed a premium tax credit and will have to repay all of the advance credit payments made on behalf of you and your tax family members.   

For purposes of claiming the premium tax credit for 2017, the following table outlines household income that is at least 100 percent but no more than 400 percent of the federal poverty line. 

This table applies only to residents of the 48 contiguous states and Washington, D.C.:

Federal Poverty Line for 2017 Returns

 

100% of FPL

.

400% of FPL

One Individual

$11,880

up to

$47,520

Family of two

$16,020

up to

$64,080

Family of four

$24,300

up to

$97,200

The federal poverty guidelines are sometimes referred to as the “federal poverty line” or FPL. The Department of Health & Human Services determines the federal poverty guideline amounts annually.

HHS provides three federal poverty guidelines: one for residents of the 48 contiguous states and Washington D.C., one for Alaska residents, and one for Hawaii residents. For purposes of the premium tax credit, eligibility for a certain year is based on the most recently published set of poverty guidelines at the time of the first day of the annual open enrollment period for coverage for that year. This means that the premium tax credit for coverage on 2017 returns is based on the 2016 guidelines. 

Other Criteria

Aside from your income, there are other factors that affect the credit amount, including:

  • Cost of available insurance coverage
  • Where you live
  • Your address
  • Your family size

 Married Filing Separately

If you are married and you file your tax return using the filing status married filing separately, you will not be eligible for the premium tax credit unless you are a victim of domestic abuse and spousal abandonment and can meet certain criteria.  Details regarding this relief are in the instructions for Form 8962 and Publication 974

Generally, a taxpayer who lives apart from his or her spouse for the last six months of the tax year is considered unmarried if the taxpayer files a separate return, maintains a household that is also the main home of the taxpayer’s dependent child for more than half the year, and furnishes more than half the cost of the household during the tax year.   

For help in finding out if you are eligible for the premium tax credit, check out the Premium Tax Credit Flow Chart or through the accessible text  Answering a few yes-or-no questions can help you determine if you might be eligible for the credit.