The Premium Tax Credit is a refundable tax credit designed to help eligible individuals and families purchase health insurance through the Health Insurance Marketplace at a more affordable cost. Eligibility and the amount of the credit depend on the household income in relation to the federal poverty line and the cost of coverage in the Marketplace plan.

Premium Tax Credit

A refundable tax credit is a tax credit that can reduce a taxpayer's liability to below zero, resulting in a refund. This type of credit is especially beneficial for low-income individuals as it can provide financial relief beyond just reducing tax owed.

Refundable Tax Credit

Eligible individuals and families

Health insurance is a contract that requires an insurer to pay some or all of a person's healthcare costs in exchange for a premium. It provides financial protection against high medical expenses and ensures access to necessary healthcare services.

Health Insurance

Health Insurance Marketplace

Affordable cost

Household income is the total gross income of all members of a household, which serves as a critical indicator of economic well-being and financial stability. It influences consumption patterns, savings, and access to credit, and is often used to assess economic inequality and inform policy decisions.

Household Income

The Federal Poverty Line (FPL) is a measure used by the U.S. government to define and quantify poverty, determining eligibility for various federal and state assistance programs. It is based on income thresholds that vary according to family size and is adjusted annually for inflation, but it doesn't account for geographic variations in the cost of living.

Concepts

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