The premium tax credit (PTC) is a refundable tax credit in the United States that helps eligible individuals and families cover the premiums for their healthcare insurance. It is payable by the Internal Revenue Service (IRS) to eligible households that have obtained healthcare insurance by a healthcare exchange (marketplace) in the tax year. The PTC can be paid in advance directly to a healthcare insurance company to offset the cost of monthly health insurance premiums. The tax credit is part of a host of Affordable Care Act tax provisions, introduced by the IRS in 2014, and is meant to extend health insurance coverage to 18 million lower and middle-income Americans.

The eligibility criteria for the premium tax credit is determined by section 1401 of the Affordable Care Act (Obamacare) . The Act was signed into law on March 23, 2010, and specified the credits are only available to individuals and families who have enrolled in a health plan offered on a healthcare exchange. The calculation of the PTC can be complex, and it is subject to specific rules and regulations set by the IRS. Eligible individuals and families are encouraged to consult the IRS guidelines or seek assistance from a tax professional for accurate calculations and guidance related to their specific situation.

The amount of the premium tax credit depends on the estimated household income for the year that is put on the Marketplace application. The credit is available to individuals and families with incomes at or above the federal poverty level who purchase coverage in the ACA marketplace in their state. Through the end of the 2025 coverage year, there is no maximum income limit for the premium tax credit. People whose benchmark premium costs more than 8.5% of household income qualify for a premium tax credit if they meet other eligibility criteria. If a persons income changes, or if they add or lose members of their household, their premium tax credit will probably change too[[5]](https://www.healthcare.gov/lower-c...