Technical Page for Premium Tax Credits

This is a technical, legal page.

Please view the Introduction and Covered CA Calculator first.   Don’t forget, you are entitled to use a agent at  NO Additional Cost

Consumer Links

Coverage through Employer is NOT taxable income

Poverty Level FPL – Program Chart  ♦  FPL Calculator

Technical & Research Links

Health Reform Summary Chart as it affects each type of Health Line

Footnote 1 The rules and regulations are quite complex.  Final ACCURATE calculators should be available by 10.1.2013 when Covered CA will start enrollment. – Top

Fact Sheet 36 B (US Treasury?)

26 USC 36 B Refundable Credit under a Qualified Health Plan

26 USC 36 B Refundable Credit for Coverage under a qualified Health Plan pdf

CFR 155.305  Eligibility Standards

26 CFR 1 & 602

final regulations final regulations

§1.36b-0Table of contents

§1.36b-1 Premium tax credit definitions
Definitions Household Income

Adjusted gross income (AGI)

is gross income from taxable sources (including wages, interest, capital gains, income from retirement accounts, alimony received) minus allowable deductions, such as unreimbursed business expenses, some medical expenses, alimony paid, and deductible retirement plan contributions. You calculate your AGI on the first page of your federal tax return and it serves as the basis for figuring the income tax you owe.

IRS 1040

     IRS Section 151 Who can be deducted

152 Dependent Defined

1.36b 2 Eligibility for Premium Tax Credit

§1.36b-2 Eligibility for premium tax credit.

§1.36b-3 Computing the premium assistance credit amount.

§1.36b-4 Reconciling the premium tax credit with advance credit payments

§1.36b-5Information reporting by Exchanges.

CFR  §1.37-1   General rules for the credit for the elderly.   *   §1.37-2   Credit for individuals age 65 or over.     * Our page on 65 + not eligible for premium free Medicare

§1.37-3 Credit for individuals under age 65 who have public retirement system income.

§1.38-1 Investment in certain depreciable property.

§1.40-1 Questions and answers relating to the meaning of the term ”qualified mixture” in section 40(b)(1).

MAGI based financial methods  42 USC 1396a (e) (14)

Citation for 9.5 %

9.5% affordable
HR 3590   Section 1001 HR 4872
Code of Federal Regulations §1.36b-2Eligibility for premium tax credit.

Report on saving $$$

A report by Milliman, commissioned by Covered California and released today, shows that those individuals with incomes less than 400% of the federal poverty level purchasing an individual plan next year are likely to pay about 47 to 84 percent less in monthly premiums compared to 2013. These consumers will benefit directly from the federal tax credits that will be available through Covered California. The study also concludes that those earning above 400 percent of the federal poverty level may see a cost increase that would average 20 percent due to increases in their monthly premiums but would be partially offset by reduced out-of-pocket cost. For many individuals facing increased premiums, they could potentially avoid some or all of the potential price increase by shopping for lower priced plans either in Covered California or on the individual market. A press release, frequently asked question document and key data points chart are linked here and available on our website:

Health Insurance Premium Tax Credit

Starting in 2014, individuals and families can take a new premium tax credit to help them afford health insurance coverage purchased through an Affordable Insurance Exchange. The premium tax credit is refundable so taxpayers who have little or no income tax liability can still benefit. The credit also can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums. On May 18, 2012, the Department of the Treasury and the IRS issued final regulations which provide guidance for individuals who enroll in qualified health plans through Exchanges and claim the premium tax credit, and for Exchanges that make qualified health plans available to individuals and employers. On Jan. 30, 2013, the Department of the Treasury and IRS released final regulations on the premium tax credit affordability test for related individuals. On April 30, 2013, the Department of the Treasury and the IRS issued proposed regulations relating to minimum value of eligible employer-sponsored plans and other rules regarding the premium tax credit. The proposed regulations solicit public comments. Additionally, Notice 2013-41, issued on June 26, 2013, provides information for determining whether or when individuals are considered eligible for coverage under certain Medicaid, Medicare, CHIP, TRICARE, student health or state high risk pool programs. This determination will affect whether the individual is eligible for the premium tax credit. Comments may be submitted electronically, mailed or hand delivered to the IRS. On June 28, 2013, the Department of the Treasury and IRS issued proposed regulations on the new reporting requirements for Exchanges. Comments may be submitted electronically, mailed or hand delivered to the IRS. For more information on the credit, see our questions and answers.

The portion of the law that will allow eligible individuals to use tax credits to purchase health coverage through an Exchange is not effective until 2014.

Exchanges will offer individuals a choice of health plans that meet certain benefit and cost standards. The Department of Health and Human Services (HHS) administers the requirements for the Exchanges and the health plans they offer. Additional information about the Exchange can be found at and in IRS REG-131491-10 issued on Aug. 12, 2011.


IRS Site on Tax Credit

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