What the Premium Tax Credit Is
The premium tax credit is a federal tax credit for people who buy health insurance through a marketplace. Our guide to the ACA health insurance marketplace in Idaho explains how it works. Most people take it in advance: the marketplace estimates the credit and pays it straight to your insurance company each month, so your premium bill is lower. That advance payment is called the advance premium tax credit, or APTC. You can also wait and claim the whole credit when you file your federal return.
What Changed for 2026
From 2021 through 2025, temporary enhanced credits made subsidies larger and removed the upper income limit. Those expired after 2025. The IRS confirms that for 2026:
- The 400% of the federal poverty level upper limit is back. Households above it generally do not qualify.
- The expected contribution percentages are higher than in recent years (table below).
- For tax years after 2025 there is no repayment cap: if you received more advance credit than you qualify for, you may have to pay back the full difference.
Separately, CMS has ended the monthly special enrollment period for people with income at or below 150% of the poverty level for plan year 2026 onward. See our special enrollment periods guide.
Who Qualifies
In general, you may qualify if all of these are true:
- You buy a plan through the marketplace.
- Your expected household income is at least 100% and no more than 400% of the federal poverty level.
- You cannot get other qualifying coverage, such as Medicare, Medicaid, or employer coverage that is affordable and meets minimum value.
- If married, you generally file a joint return, and nobody can claim you as a dependent.
Poverty guidelines: marketplace savings use the prior year’s numbers. Coverage for 2026 uses the 2025 guidelines, $15,650 for one person plus $5,500 for each additional person. Coverage for 2027 uses the 2026 guidelines, $15,960 plus $5,680 for each additional person, per the federal marketplace and HHS.
| Household size | 100% | 400% |
|---|---|---|
| 1 | $15,650 | $62,600 |
| 2 | $21,150 | $84,600 |
| 3 | $26,650 | $106,600 |
| 4 | $32,150 | $128,600 |
Employer coverage: a job-based offer generally blocks the credit if it is affordable. For plan years beginning in 2026, that means the employee’s cost for self-only coverage is no more than 9.96% of household income; for 2027, 10.22%. Adults with lower incomes may qualify for Medicaid instead; we check whether you qualify and help you apply.
How the Amount Is Figured
The credit fills the gap between two numbers:
- The premium for the benchmark plan, the second-lowest-cost Silver plan available to your household where you live.
- Your expected contribution: your household income multiplied by the applicable percentage for your income level.
If the benchmark plan costs more than your expected contribution, the difference is your credit. You can put it toward any metal level. Choose a cheaper plan and you pay less than your expected contribution; choose a pricier plan and you pay more. Silver is the only level that can also carry cost-sharing reductions, covered in our metal levels guide.
The 2026 and 2027 Applicable Percentages
| Household income (% of poverty level) | 2026 | 2027 |
|---|---|---|
| Less than 133% | 2.10% | 2.15% |
| 133% to less than 150% | 3.14% – 4.19% | 3.23% – 4.30% |
| 150% to less than 200% | 4.19% – 6.60% | 4.30% – 6.78% |
| 200% to less than 250% | 6.60% – 8.44% | 6.78% – 8.66% |
| 250% to less than 300% | 8.44% – 9.96% | 8.66% – 10.22% |
| 300% to 400% | 9.96% | 10.22% |
Within each range the percentage rises steadily with income. Because the benchmark premium depends on your age, county and household, we do not quote sample dollar credits here. We can estimate your figure with you in a few minutes.
Advance Payments and Tax Time
Every advance credit is an estimate based on the income you expect. When you file, you complete IRS Form 8962 to compare the advance credit with the credit you actually qualify for, based on your real income. If you got too little, you get the difference back. If you got too much, you repay it, and from 2026 on there is no cap on that repayment.
That makes it important to report changes as they happen: a raise, a new job, a marriage, a new baby or a move. Tell us, and we report the change for you. If a life change also affects your coverage, a Special Enrollment Period may apply, and our ACA qualifying event finder can help check.
For carriers and plan options in Idaho, see our ACA / Marketplace page.
Want to see your 2027 tax credit?
We can estimate your credit with you, compare the ACA marketplace plans we represent after the credit, and enroll you before December 15.
Request a free comparison Call 208-350-9933Frequently Asked Questions
Who qualifies for a premium tax credit in 2026?
Generally, people who buy an ACA marketplace plan, have household income between 100% and 400% of the federal poverty level, cannot get affordable employer coverage or other qualifying coverage such as Medicare or Medicaid, and meet the tax-filing rules. The enhanced credits that removed the 400% limit expired after 2025. Our licensed agents at Personal Touch compare the plans and enroll you at no cost. Call or text 208-350-9933.
What is 400% of the federal poverty level for 2026 coverage?
2026 Marketplace savings use the 2025 poverty guidelines: $15,650 for one person plus $5,500 for each additional person. So 400% is $62,600 for a single person and $128,600 for a family of four. Alaska and Hawaii use higher amounts. 2027 coverage uses the 2026 guidelines, $15,960 for one person plus $5,680 for each additional person. Our licensed agents at Personal Touch compare the plans and enroll you at no cost. Call or text 208-350-9933.
Will I have to pay back my tax credit?
You might. When you file your taxes, you reconcile the advance credit paid to your insurer with the credit you actually qualify for, based on your real income. According to the IRS, for tax years after 2025 there is no cap on how much excess advance credit you may have to repay, so reporting income changes promptly matters. Our licensed agents at Personal Touch compare the plans and enroll you at no cost. Call or text 208-350-9933.
What happens if my job offers insurance?
If your employer offers coverage that is affordable and meets minimum value, you generally cannot get a premium tax credit. For 2026 plan years, employer coverage is considered affordable if the employee’s share of self-only coverage is no more than 9.96% of household income; for 2027 the figure is 10.22%. Our licensed agents at Personal Touch compare the plans and enroll you at no cost. Call or text 208-350-9933.
Can I use a premium tax credit with a Bronze or Gold plan?
Yes. The credit amount is based on the second-lowest-cost Silver plan in your area, but you can apply it to any marketplace metal level. Cost-sharing reductions, the separate discount on deductibles and copays, are only available if you choose a Silver plan. Our licensed agents at Personal Touch compare the plans and enroll you at no cost. Call or text 208-350-9933.
Related Guides
Coverage pages for this topic: ACA / Marketplace. Other topics in the Learning Center: Medicare, Life Insurance, Final Expense, Annuities, Long-Term Care, Disability Insurance, Supplemental Health, Short-Term Medical, Travel Insurance.
Sources
- IRS — Questions and answers on the premium tax credit
- IRS — Rev. Proc. 2025-25 (2026 applicable percentage table)
- IRS — Rev. Proc. 2026-26 (2027 applicable percentage table)
- Federal marketplace (CMS) — Federal poverty level (FPL)
- HHS ASPE — Poverty guidelines
- Federal marketplace (CMS) — Health plan categories: Bronze, Silver, Gold & Platinum
Figures are labelled with the year they apply to and were checked against the official sources above on the review date. Rules and amounts change; confirm current figures with the agency that publishes them. This guide is general education, not individual advice.