Who can get it
- Household income of at least 100 percent and no more than 400 percent of the federal poverty line for your family size. For tax years 2021 to 2025 the 400 percent cap was temporarily lifted; for 2026 it applies again. The guidelines themselves are in federal poverty level 2026.
- Marketplace coverage for at least one month, excluding catastrophic plans.
- No affordable employer coverage that provides minimum value. For 2026 the affordability line is 9.96 percent of household income; for an employee's spouse or dependents it is measured against the cost of covering the employee and those family members.
- Not eligible for Medicaid, Medicare, CHIP or TRICARE.
- Not filing married filing separately, apart from a special rule for victims of domestic abuse or spousal abandonment, and not claimable as someone's dependent.
Household income here is modified adjusted gross income for you and every family member who must file, a version explained in AGI vs MAGI.
How the amount is set
The credit is generally the premium of the second lowest cost silver plan available for your coverage family, the benchmark, minus an expected contribution: a percentage of household income. It cannot exceed the premiums of the plan you enroll in. The 2026 percentages, which rise from the initial to the final figure across each band:
| Household income, % of poverty line | Initial | Final |
|---|---|---|
| Under 133% | 2.10% | 2.10% |
| 133% to under 150% | 3.14% | 4.19% |
| 150% to under 200% | 4.19% | 6.60% |
| 200% to under 250% | 6.60% | 8.44% |
| 250% to under 300% | 8.44% | 9.96% |
| 300% to 400% | 9.96% | 9.96% |
There is no row above 400 percent, which is where the credit stops in 2026.
A worked example
Assume household income of $50,000 that falls between 300 and 400 percent of the poverty line for the family's size, a benchmark silver plan of $7,200 a year and a chosen plan of $6,000:
| Step | Amount |
|---|---|
| Expected contribution, 9.96% of income | $4,980 |
| Benchmark premium minus contribution | $2,220 |
| Credit, no more than the chosen plan's premium | $2,220 |
| If $3,000 was paid in advance, repaid at filing | $780 |
The last row shows the risk of a low income estimate: advance payments set on a lower income than the year turns out to have produce an excess, and from 2026 all of it is repaid.
Advance payments and Form 8962
- Advance payments: the Marketplace estimates your credit and can pay all, some or none of it to your insurer each month; you can also take it all when you file.
- Form 1095-A: the Marketplace sends it by early February with the figures you need.
- Form 8962: compares the credit you are allowed with the advance payments. Any advance payment means you must file it with a federal return.
- No repayment cap from 2026: before 2026, caps could limit how much of an excess you repaid; for tax years after 2025, you repay all of it.
Report changes during the year
IRS Publication 974 lists changes to report to the Marketplace so it can adjust advance payments: changes in household income, moving, gaining or losing other coverage, job changes, birth or adoption, marriage or divorce, and other changes in who is in your tax family. Enrollment windows are in health insurance open enrollment, and coverage after a job ends is compared in COBRA explained. The income tax calculator helps estimate the income figure before you apply.
Frequently asked questions
Who qualifies for the premium tax credit in 2026?
In general, people with household income of at least 100 percent but no more than 400 percent of the federal poverty line who buy coverage through the Marketplace, cannot get affordable employer coverage or Medicaid, Medicare, CHIP or TRICARE, do not file married filing separately and cannot be claimed as someone's dependent, per the IRS. The temporary removal of the 400 percent cap covered tax years 2021 through 2025.
How is the premium tax credit calculated?
It is generally the premium of the second lowest cost silver plan for your coverage family minus a set percentage of your household income, but no more than the premiums of the plan you actually enroll in. For 2026 the percentage runs from 2.10 percent at the lowest incomes to 9.96 percent from 300 to 400 percent of the poverty line, per Rev. Proc. 2025-25.
Do I have to pay back the premium tax credit?
If your advance payments were more than the credit you are allowed when you file, the difference is added to your tax. For tax years after 2025 there is no repayment cap: you must repay the full excess, according to the IRS.
What is Form 8962?
The form you use to claim the premium tax credit and reconcile it with advance payments made to your insurer. If any advance payments were made, you must file it with your federal return, even if you would not otherwise have to file.
What is household income for the premium tax credit?
Your modified adjusted gross income plus that of every family member who is required to file a return. For this purpose MAGI adds excluded foreign income, nontaxable Social Security benefits and tax-exempt interest to AGI; SSI does not count.
Sources
- IRS Fact Sheet FS-2025-10, Questions and answers about the premium tax credit (December 2025: what the credit is, eligibility, income from 100% to 400% of the federal poverty line with the cap removed for 2021 to 2025, household income, the credit as the second lowest cost silver plan minus a share of income, the 9.96% affordability percentage for 2026, Form 8962 and Form 1095-A, no repayment cap for tax years after 2025)
- IRS Rev. Proc. 2025-25 (the 2026 applicable percentage table from 2.10% to 9.96% and the 9.96% required contribution percentage)
- IRS Publication 974 (2025), Premium Tax Credit (changes in circumstances to report to the Marketplace)
- IRS: One, Big, Beautiful Bill provisions (removal of limitations on repayment of excess advance premium tax credit payments for taxable years after December 31, 2025)
General information based on the sources above, not tax, legal or financial advice.