APTC stands for advance premium tax credit. This is a federal government subsidy that can help lower the cost of your monthly health insurance premium. You can apply for it when you apply for marketplace health insurance. You will also be able to see an estimate of your APTC amount at that time.

When you select your marketplace health insurance, you can choose how much of the estimated APTC you want to use toward each month’s premium. This amount is sent directly from the government to your health insurance company.

Qualifying U.S. citizens and legal immigrants who buy health insurance on the Health Insurance Marketplace may receive an advance premium credit. You must apply for the credit, and it is based on your annual household income and family size.

Your annual household income must be between 100% and 400% of the federal poverty level, and you cannot be eligible for any other qualified health insurance benefit.

Generally, no – unless you used more credit than you should have received.

The amount of your premium tax credit is partly based on your estimated income; the lower your estimated income, the higher your premium tax credit is likely to be. However, when you file your taxes for the year, you will have to use Form 8962 to reconcile the amount of tax credits you used – which were based on your estimated income – with the amount you should have received based on your actual income for the year.

If your actual income was higher than what you estimated when you applied for the credit, you may have received more credit than you qualified for. And if you used more than you qualified for, you may owe money. If you received less than what you qualified for, you may owe less on your taxes or may even receive a refund.

Premium tax credits are only available to those who buy health insurance on the Health Insurance Marketplace.

You will not be able to qualify for a premium tax credit if you:

• Have an annual household income above 400% or below 100% of the federal poverty level
• Qualify for Medicaid or Medicare or have access to qualified job-based health insurance
• Are not a U.S. citizen and do not legally reside in the United States

If you qualify for a premium tax credit, you can use the financial assistance to lower the cost of your monthly insurance premium. At the end of the year, when you file your tax return, you will need to reconcile the premium credit you received based on your estimated income with the credit you should have received based on your actual income.

If you used a premium tax credit to lower your monthly premium, you may:

• Get a refund if the credit used was less than the total amount you qualified for
• Owe money if the credit used is more than the total amount you qualified for

Your premium tax credit is calculated by subtracting the cost for the second-lowest-cost silver plan available to you on the Health Insurance Marketplace from the maximum amount you are expected to pay toward your health insurance premiums.

When you apply for a plan on the Health Insurance Marketplace, you can opt to check if you are eligible for savings, known as subsidies. If you opt in to savings, the system will verify your eligibility and provide an estimate of your available tax credit based on the income information you provide.