ACA Subsidy Calculator

The premium tax credit is a federal subsidy that lowers what you pay for a health plan bought through the ACA marketplace. It caps your expected contribution toward the benchmark Silver plan at a set percentage of your income, then pays the rest as a credit. You can take it in advance to reduce your monthly premium or claim it when you file your taxes. The credit is larger when your income is lower and when the benchmark premium in your area is higher.

It first finds your income as a percentage of the federal poverty level for your household size and region. That percentage sets your applicable percentage on a sliding scale, which is multiplied by your income to get your expected annual contribution. Your subsidy is the benchmark Silver premium for the year minus that contribution, and it never drops below zero. Dividing by 12 gives the monthly premium tax credit shown at the top.

The benchmark is the second-lowest-cost Silver plan (SLCSP) available to your household in your area. The marketplace uses its premium to size your credit, even if you end up choosing a cheaper or more expensive plan. You can find your benchmark premium on HealthCare.gov or your state exchange by entering your zip code, ages, and household. Enter the monthly amount for your whole household so the estimate lines up with the marketplace.

Under the enhanced rules used for plan years 2021 to 2025, your contribution is capped between 0% and 8.5% of income with no upper income limit. Under the original standard rules, the scale runs from about 2% to 9.5% and a hard cliff cuts off all help above 400% of the poverty level. Switching schedules lets you compare both, which matters because the enhanced rules were set to expire. Check the law in force for the year you are pricing, since Congress can extend or change these caps.

Your subsidy depends on income relative to the federal poverty level, and that level rises with each additional person in your household. Alaska and Hawaii use higher poverty guidelines, so the calculator raises the threshold when you select them. A bigger household or a higher guideline lowers your income percentage, which usually increases your credit. Count everyone on your tax return, not just the people who need coverage, to get the right number.

No. This is an educational estimate, not financial or tax advice. The marketplace sets your actual credit from your verified income, your local benchmark premium, the ages of those covered, and the rules in force for that plan year, so your real figure can differ. Confirm your numbers on HealthCare.gov or your state exchange, and reconcile any advance credit on IRS Form 8962 when you file.