If you’re buying health insurance through the Health Insurance Marketplace, Advanced Premium Tax Credits (APTC) could save you hundreds or even thousands of dollars each year. Here’s what you need to know:
What Are APTCs?
Advanced Premium Tax Credits are federal subsidies that help lower your monthly health insurance premiums. Instead of paying full price for Marketplace coverage and waiting until tax time for relief, these credits are paid directly to your insurance company throughout the year—reducing what you pay each month.
Who Qualifies?
You may be eligible if you:
- Purchase insurance through the Health Insurance Marketplace
- Have household income between 100-400% of the federal poverty level (though some may qualify at higher incomes)
- Don’t have access to affordable employer-sponsored coverage
- Aren’t eligible for government programs like Medicaid or Medicare
- Are US citizens or have up-to-date immigration documents
The Tax Connection
Here’s where it gets important: APTCs are based on your estimated annual income when you enroll. At tax time, the IRS reconciles what you received with what you actually earned.
If you earned less than estimated: You may get additional credit as a tax refund
If you earned more than estimated: You might owe money back (though there are caps on repayment amounts)
Pro Tips
✅ Update your Marketplace application if your income changes during the year
✅ Keep documentation of your income and insurance payments
✅ Consider whether to take the full credit monthly or less to avoid owing at tax time
APTCs make health insurance more affordable for millions of Americans, but staying on top of income changes helps avoid tax-time surprises. Questions? Consult a tax professional or visit HealthCare.gov.
