Advance Premium Tax Credit (APTC)
Definition current for the 2026 plan year · Last reviewed July 2026
In one sentence: The premium tax credit paid monthly to your insurer in advance, based on your estimated income — reconciled on your tax return.
APTC is the same subsidy as the premium tax credit, just paid in advance: the marketplace sends it straight to your insurer each month so your bill is reduced immediately instead of at tax time. Nearly everyone takes it this way.
The catch is reconciliation. The advance is based on the income you estimated; the credit you actually earned is based on the income you report on your return. If reality came in higher, you repay the difference via Form 8962. Below 400% of FPL, repayment is capped (a few hundred to a few thousand dollars depending on income and filing status). At or above 400% there is no cap in 2026 — you repay every advanced dollar, which is how a $2,000 year-end bonus can create an $8,000 tax bill for a household near the line.
Defensive moves: estimate income conservatively, report changes to the marketplace mid-year, and if December pushes you near the cliff, see the MAGI-lowering playbook.