Advanced Premium Tax Credits (APTC)
Advanced Premium Tax Credits
APTC — A tax credit that can reduce what you pay for insurance. Many people refer to this as a subsidy.
When you apply for coverage in the Health Insurance Marketplace, you estimate your expected income. If your estimate falls in the range to save, you can use an advance payment of the premium tax credit to lower your monthly insurance bill.
If at the end of the year you’ve taken more premium tax credit in advance than you’re due based on your final income, you’ll have to pay back the excess when you file your federal tax return.
If you’ve taken less than you qualify for, you’ll get the difference back.
The Marketplace uses your Modified Adjusted Gross Income (MAGI) to determine your eligibility for the Advanced Premium Tax Credits (APTC).
The MAGI amount will not be be found on your Federal income tax form.
♦ Most of the time, your Modified Adjusted Gross Income (MAGI) will be your Adjusted Gross Income (AGI) plus any tax-exempt interest income you may have.
In States that did not expand Medicaid, the household MAGI must be greater than 100% of Federal Poverty Level to be able to receive a tax credit.
Related content
• What is the Marketplace?
• Who can use the Marketplace?
• Premium Tax Credit
• Can I get a subsidy?
