Advance Premium Tax Credit (APTC) Calculator
Use this calculator to estimate your potential Advance Premium Tax Credit (APTC), which helps lower your monthly health insurance premiums purchased through the Health Insurance Marketplace.
Look up the current FPL for your household size. For example, in 2024, FPL for 1 person is $14,580; 2 people is $19,720; 3 people is $24,860.
This is the benchmark plan cost. You can find this on your state's Marketplace website.
Understanding the Advance Premium Tax Credit (APTC)
The Advance Premium Tax Credit (APTC) is a federal subsidy designed to make health insurance more affordable for individuals and families who purchase coverage through the Health Insurance Marketplace (also known as the exchange). It helps reduce your monthly premium payments, and you can choose to have it paid directly to your insurance company each month, lowering your out-of-pocket costs.
Who Qualifies for APTC?
Generally, you may qualify for APTC if your household income is between 100% and 400% of the Federal Poverty Level (FPL) for your household size. In states that have expanded Medicaid, the lower limit for APTC eligibility is typically 138% of the FPL. Other requirements include:
- You are not eligible for affordable coverage through an employer or government programs like Medicaid, CHIP, or Medicare.
- You purchase a health plan through the Health Insurance Marketplace.
- You are a U.S. citizen or lawfully present immigrant.
- You cannot be claimed as a dependent on someone else's tax return.
Key Terms Explained:
- Household Income (Modified Adjusted Gross Income – MAGI): This is your total income, including wages, salaries, self-employment income, and certain other types of income, with some adjustments. It's crucial for determining your eligibility and the amount of your APTC.
- Federal Poverty Level (FPL): The FPL is a set of income thresholds used by the federal government to determine eligibility for various federal programs and benefits. The FPL varies based on your household size. For example, the FPL for a single person is lower than for a family of four. You'll need to look up the current FPL for your specific household size and year.
- Second Lowest Cost Silver Plan (SLCSP): This is a benchmark plan used to calculate your APTC. The APTC amount is determined by the difference between the cost of the SLCSP in your area and the maximum amount you're expected to contribute towards premiums based on your income relative to the FPL. You don't have to enroll in the SLCSP; you can use your APTC to help pay for any Marketplace plan (Bronze, Silver, Gold, or Platinum), but the subsidy amount is fixed based on the SLCSP.
- Maximum Contribution Percentage: This is the percentage of your household income that the government expects you to contribute towards your health insurance premiums. This percentage is on a sliding scale: the lower your income relative to the FPL, the lower your expected contribution percentage, and thus the higher your APTC. The American Rescue Plan Act (ARPA) and Inflation Reduction Act (IRA) temporarily enhanced these subsidies, making more people eligible and increasing the amount of assistance.
How the Calculator Works:
This calculator estimates your APTC by:
- Calculating your household income as a percentage of the Federal Poverty Level (FPL).
- Determining your "maximum contribution percentage" based on your FPL percentage. This is the portion of your income you're expected to pay towards premiums.
- Calculating your maximum monthly premium contribution based on that percentage.
- Subtracting your maximum monthly contribution from the monthly cost of the Second Lowest Cost Silver Plan (SLCSP) in your area. The result is your estimated monthly APTC.
Example Calculation:
Let's say a family of three has an estimated annual household income of $45,000. The FPL for a family of three is $24,860. The monthly cost of the SLCSP in their area is $600.
- FPL Percentage: ($45,000 / $24,860) * 100% = 181% FPL (approximately)
- Based on 181% FPL, their maximum contribution percentage might be around 1.24% (using the sliding scale).
- Annual Contribution Limit: 1.24% of $45,000 = $558
- Monthly Contribution Limit: $558 / 12 = $46.50
- Estimated Monthly APTC: $600 (SLCSP cost) – $46.50 (monthly contribution) = $553.50
This means the family could receive an estimated $553.50 per month in APTC, reducing their premium for the SLCSP from $600 to $46.50. If they choose a plan more expensive than the SLCSP, they would pay the difference in addition to their $46.50. If they choose a cheaper plan, they would pay less than $46.50, or even $0, with the remaining APTC not being paid out.
Remember, this calculator provides an estimate. Your actual APTC will be determined by the Health Insurance Marketplace based on your application and the most current FPL guidelines and contribution percentages.