Calculate your ACA/Obamacare premium subsidies and tax credits

ACA/Obamacare Tax Credit Calculator

The ACA / Obamacare premium subsidy (also known as the Premium Tax Credit) is available to households whose projected income does not exceed 400% of the prior year’s poverty level. But the American Rescue Plan and Inflation Reduction Act eliminated that income cap for 2021 through 2025.

Using the calculator above, you can see the expected impact of the new rules on your premium subsidies.

Calculate your subsidy

ACA premium subsidies, also called advance payments, reduce the cost of Marketplace insurance for people with moderate or lower incomes. They are calculated using your expected income for the year and the list price of a silver plan.

Normally, you can only get a subsidy if your projected household income is less than 400% of the Federal Poverty Level. However, thanks to the American Rescue Plan and Inflation Reduction Act of 2021 and 2022, these subsidies are larger and more widely available through 2025.

You’ll need to use your modified adjusted gross income (MAGI) from last year’s tax return for this tool. You’ll also need to estimate the income for everyone in your household who will apply for Marketplace coverage this year. This includes yourself, your spouse if married, and any children you’ll claim as tax dependents. This information will help you calculate your 2024 subsidy. You can get exact plan prices and savings by filling out a Marketplace application.

Calculate your tax credit

The Premium Tax Credit is a new refundable credit that can help pay for Marketplace health insurance coverage. You can claim this advance payment throughout the year to lower your monthly premium, or you can wait and claim it with your tax return at the end of the year to either lower your overall tax bill or increase your refund.

The credit is based on your household’s income and the list price of the benchmark plan in your area. You’ll get the most accurate estimate if you use actual cost-sharing amounts and the correct annual modified adjusted gross income (MAGI) for your household size, as reported on your tax return. Each January, the ACA releases updated Federal Poverty Level (FPL) income levels that are used to determine your eligibility for Obamacare subsidies. The new FPL income levels take into account certain types of income, like tax-exempt interest and excluded Social Security earnings. Generally, you’ll qualify for subsidies if the second lowest-cost silver plan costs more than a certain percentage of your MAGI.

Calculate your tax refund

The ACA premium subsidies are tax credits, and you can claim them on your tax return. You can also choose to receive them throughout the year and apply them directly to your health insurance, reducing your monthly costs. This is known as advance payment.

The tool calculates your potential subsidized premium based on your zip code and projected income for the year. It shows you a comparison of your estimated cost with the second lowest cost silver plan in your area. You can also use the tool to determine whether you are eligible for other types of savings, such as cost-sharing reductions.

The tools below are a starting point to estimate the impact of the Affordable Care Act on your tax situation. They are based on the current tax law and may be subject to change. If you have questions, contact your tax professional or LegUp Health.

Calculate your advance payment

As part of the ACA / Obamacare healthcare subsidies are available to help reduce the cost of marketplace coverage. These credits are based on your estimated household income and family size. You can either receive the credit in advance and have it sent to your insurance provider each month or claim it when you file your tax return.

If you choose to take the credit in advance, the Marketplace will send one-twelfth (1/12) of your estimated annual premium tax credit directly to your insurance company each month. The remainder of the credit will be paid when you file your federal income tax return the following year. You will need to report any changes in your circumstances to the marketplace throughout the year. This will help ensure that your credit is accurate. When you file your return, you will use IRS Form 8962 to reconcile any advance payments of the premium tax credit with your actual credit based on your final income.

Learn more

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