What is Premium tax credit?
In short
The premium tax credit is a refundable credit that helps eligible individuals pay for health insurance bought through a government health insurance marketplace. It is often paid in advance to the insurer and reconciled on the tax return.
Key takeaways
- The reconciliation is done on Form 8962; excess advance payments must be repaid.
- From 2026, the One Big Beautiful Bill Act removes the caps on repaying excess advance payments.
- The temporarily enhanced credit amounts ended after 2025.
Where it's tested
REG: Filing Status, Credits & Alternative Minimum Tax — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An unmarried taxpayer pays more than half the cost of maintaining a separate household that is the principal residence of the taxpayer's dependent mother. The mother does not live with the taxpayer. What filing status may the taxpayer use?