What is a Premium Tax Credit?

A premium tax credit is a federal subsidy that helps eligible individuals and families afford health insurance purchased through the Health Insurance Marketplace. The credit amount is based on your estimated annual income relative to the federal poverty level and can be applied monthly to reduce premium payments (advance premium tax credit) or claimed when filing taxes. Eligibility typically requires income between 100% and 400% of the federal poverty level.

Why premium tax credits matter

• Makes insurance affordable: Significantly reduces monthly premium costs for eligible individuals
• Adjusts to income changes: Credit amounts vary based on income fluctuations throughout the year
• Expands coverage access: Enables millions of Americans to afford comprehensive health insurance

How Solace can help

A Solace advocate can help you determine premium tax credit eligibility, calculate estimated credit amounts, and understand how to apply credits to your monthly premiums. Advocates can also assist with reconciling credits during tax filing and updating income information when circumstances change.

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