The Premium Tax Credit Subsidy Caps By Percentage of Household Income for SLCSP 2021
Premium tax credits are tax credits that can be taken in advance as Advanced Premium Tax Credits or at tax time as Premium Tax credits (or you can do a mix). Premium tax credits cap premium spending for a family based on MAGI income compared to the federal poverty level and are based on the cost of the second lowest silver plan (SLCSP) in a state’s Marketplace. To qualify you must purchase a marketplace plan.
The chart below shows the minimum and maximum percentage of the household income that a person will pay for that plan. The amount you’ll pay is based on your household income (compared to the federal poverty level) and is adjusted based on the price of the plan chosen.
Changes to Tax Credit Caps 2021-2022 Under the American Rescue Plan Act
The American Rescue Plan Act made changes to the premium caps for 2021-2022.
|Table 1: Percent of Income Paid for Marketplace Benchmark Silver Premium, by Income|
|Income (% of poverty)||Affordable Care Act
(before legislative change)
|COVID-19 Relief (current law 2021-2022)|
|Under 100%||Not eligible for subsidies*||Not eligible for subsidies**|
|100% – 138%||2.07%||0.0%|
|138% – 150%||3.10% – 4.14%||0.0%|
|150% – 200%||4.14% – 6.52%||0.0% – 2.0%|
|200% – 250%||6.52% – 8.33%||2.0% – 4.0%|
|250% – 300%||8.33% – 9.83%||4.0% – 6.0%|
|300% – 400%||9.83%||6.0% – 8.5%|
|Over 400%||Not eligible for subsidies||8.5%|
|NOTES: *Lawfully present immigrants whose household incomes are below 100% FPL and are not otherwise eligible for Medicaid are eligible for tax subsidies through the Marketplace if they meet all other eligibility requirements.
**In the COVID-19 relief law, lawfully present immigrants in states that have not expanded Medicaid would continue to be eligible for marketplace subsidies. In addition, people receiving Unemployment Insurance (UI) are treated as though their income is no more than 133% of poverty for the purposes of the premium tax credit. This could extend premium tax credits to some individuals with incomes below poverty.
NOTE: To qualify for tax credits you must make between 100% – 400% of the poverty level (FPL). If your state expanded Medicaid you will be eligible for Medicaid instead of tax credits below 133% (or 138% adjusted) FPL. However, please note, those who aren’t eligible for Medicaid expansion who are on unemployment can get marketplace assistance under the American Rescue Act.
- Premium tax credit caps for 2021 are published in Rev. Proc. 2020-36.