What Is the Premium Tax Credit?

The Premium Tax Credit helps eligible individuals and families pay for health insurance purchased through the ACA Marketplace. Your eligibility is based on your household income as a percentage of the federal poverty level. You can have the credit paid in advance directly to your insurer each month, or claim it when you file your return. If your actual income differs from your estimate, you'll reconcile the difference on Form 1040. Losing eligibility mid-year (like getting a higher-paying job) can result in having to repay some of the credit.