To be eligible for the Premium Tax Credit under the Affordable Care Act, all of the following must apply:
• Your income must be between 100% and 400% of Federal Poverty Line (see below) for a given family size.
• You cannot be claimed as a dependent.
• If married, you must file a joint return (although some exceptions may apply).
• You must be enrolled in a qualified health plan through Marketplace.
• Cannot be eligible for other minimum essential coverage.
• Premiums must be paid.
The Federal Poverty Line (FPL)
The federal poverty line (FPL) is an income amount determined by the U.S. Department of Health and Human Services (HHS), which is adjusted for family size and considered the poverty level for the year. The HHS determines the federal poverty line amounts annually and publishes a table reflecting these amounts at the beginning of each calendar year.
The HHS provides three federal poverty lines:
• One for residents of the 48 contiguous states and D.C.,
• One for Alaska residents, and
• One for Hawaii residents.
The federal poverty line (FPL) is the indicator used to determine if you are eligible for the Premium Tax Credit; and if you are eligible, how much of the credit you will be eligible for.
For your 2015 tax returns, the 2014 federal poverty line amounts will be used in the calculation of the credit.
The calculation for the credit is based on the following:
• One individual: $11,670 (100% FPL) — $46,680 (400% FPL)
• Family of two: $15,730 (100% FPL) — $62,920 (400% FPL)
• Family of four: $23,850 (100% FPL) — $95,400 (400% FPL)
The size of the Premium Tax Credit is calculated on a sliding scale basis. Therefore, a taxpayer with household income at 200 percent of the FPL for the taxpayer’s family size will get a larger credit to help cover the cost of insurance, than a taxpayer with the same family size who has household income at 300 percent of the FPL. In other words, the higher the household income, the lower the amount of the credit.