Understanding ACA Health Insurance Premium Tax Credit: What You Need to Know

The Affordable Care Act (ACA) provides financial assistance to eligible individuals and families to help them afford health insurance coverage. One way this assistance is provided is through premium tax credits, which can significantly reduce the monthly cost of health insurance premiums.

What are Premium Tax Credits?

Premium tax credits are government subsidies that are applied to the monthly cost of health insurance premiums. These credits are available to individuals and families who meet certain income requirements and purchase health insurance through the Health Insurance Marketplace, a government-run website where people can compare and enroll in health plans.

To qualify for premium tax credits, you must:

Be a U.S. citizen or legal resident
Not be eligible for other health insurance coverage, such as Medicare or Medicaid
Have a household income that is between 133% and 400% of the federal poverty line

How Do I Get Premium Tax Credits?

If you meet the eligibility requirements, you can apply for premium tax credits when you enroll in a health plan through the Health Insurance Marketplace. You will need to provide information about your income, household size, and other factors. Once you are enrolled in a plan, the Marketplace will automatically apply the premium tax credits to your monthly premiums.

How Can I Get a Refund of Premium Tax Credits?

If you received premium tax credits but later find out that you overestimated your income, you may be eligible for a refund of those credits. You can claim this refund when you file your federal income tax return.

To get a refund of premium tax credits, you will need to complete Form 8962, Premium Tax Credit. This form is used to calculate the amount of premium tax credits you are eligible for and to determine if you are due a refund.

What if I Don’t Use Health Insurance?

If you enroll in a health plan through the Health Insurance Marketplace but do not use the insurance, you will not be eligible for premium tax credits. This is because premium tax credits are only available for individuals and families who have health insurance coverage.


Premium tax credits are a valuable resource that can help make health insurance more affordable for eligible individuals and families. If you believe you are eligible, be sure to apply for premium tax credits when you enroll in a health plan through the Health Insurance Marketplace.

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