Premium Tax Credit (PTC)
Definition current for the 2026 plan year · Last reviewed July 2026
In one sentence: The ACA subsidy: a refundable tax credit that caps your benchmark plan cost at 2.1%–9.96% of income in 2026, for incomes between 100% and 400% of FPL.
The premium tax credit is the ACA's main subsidy. It fills the gap between what the benchmark plan costs and what the law says you can afford — in 2026, between 2.1% of income (near the poverty line) and 9.96% (at 300–400% of FPL). Earn between 100% and 400% of the federal poverty level and the credit covers the rest; earn above 400% and, since the enhanced credits expired at the end of 2025, you get nothing — the subsidy cliff.
Two features people miss. First, the credit is portable across plans: it's calculated against the benchmark silver plan but you can spend it on any metal tier, which is why cheap bronze plans sometimes cost $0 after credit. Second, it's reconciled at tax time: most people take it in advance (see APTC) based on estimated income, then square up on Form 8962 with their real income. Estimate low and you owe money back in April.
Estimate yours in the 2026 subsidy calculator.