The Premium Tax Credit (PTC) in 2025 is designed to help you lower the cost of your health insurance if you purchase your coverage through the Health Insurance Marketplace. But the actual amount you receive is not fixed—it depends on your income, family size, and the cost of the benchmark plan in your state.
So how much can you get?
For 2025, the credit amount is based on the cost of the second-lowest cost silver plan (SLCSP) minus a percentage of your household income. You are not required to choose this specific plan—it is just the government’s benchmark to calculate your benefit.
The percentage you are expected to contribute out of pocket cannot exceed 8.5% of your household income, thanks to a temporary rule extended through 2025. That means if your plan costs more than this percentage, the PTC helps cover the difference.
For example, a single person earning between $15,060 and $60,240, or a family of four making $31,200 to $124,800, could qualify.
Who qualifies for the Premium Tax Credit in 2025?
You may be eligible for the PTC if you meet all of the following requirements:
- You must purchase your insurance through the Health Insurance Marketplace. If you get coverage elsewhere (like your job or a private insurer), you do not qualify.
- You must be a U.S. citizen or legally present.
- Your income must fall between 100% and 400% of the federal poverty level—although for 2025, the 400% cap has been waived, so higher earners may still qualify based on the 8.5% income cap rule.
- You cannot be claimed as a dependent on someone else’s tax return.
- You must not be eligible for other health care coverage like Medicaid, Medicare, or employer-sponsored insurance that meets minimum value standards.
- If you are married, you must file a joint tax return to claim the credit.
What is IRS Form 8962 and why do you need it?
When tax time comes around, you will need IRS Form 8962 to officially claim the Premium Tax Credit. This form is used for two main purposes:
- To calculate the actual credit amount you qualify for based on your final income.
- To reconcile any advance payments of the credit you received throughout the year.
If you overestimated your income and got too much advance credit, you may need to pay some of it back. If you underestimated your income, you could receive more credit on your return.
How to claim the Premium Tax Credit in 2025
You can use the PTC in two ways:
- Get advance payments during the year to lower your monthly premiums.
- Claim it at tax time as a refundable credit on your tax return.
If you choose advance payments, make sure you update your Marketplace account whenever your income or household size changes. This helps you avoid overpayments or underpayments.
To claim the credit, file Form 8962 along with your federal tax return. The form walks you through how to calculate and reconcile your credit, so make sure you have all your income and coverage info handy.
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