Premium Tax Credit (PTC)

§ 36B. Refundable credit for coverage under a qualified health plan(a) In generalIn the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year. (b) Premium assistance credit amountFor purposes of this section—(1) In generalThe term “premium assistance credit amount” means, with respect to any taxable year, the sum of the premium assistance amounts determined under paragraph (2) with respect to all coverage months of the taxpayer occurring during the taxable year. (2) Premium assistance amountThe premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of—(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 11 So in original. Probably should be preceded by “section”. of the Patient Protection and Affordable Care Act, or (B) the excess (if any) of—(i) the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over (ii) an amount equal to 1/12 of the product of the applicable percentage and the taxpayer’s household income for the taxable year. (3) Other terms and rules relating to premium assistance amountsFor purposes of paragraph (2)—(A) Applicable percentage(i) In generalExcept as provided in clause (ii), the applicable percentage for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier: In the case of household income (expressed as a percent of poverty line) within the following income tier:The initial premium percentage is—The final premium percentage is— Up to 133%2.0%2.0% 133% up to 150%3.0%4.0% 150% up to 200%4.0%6.3% 200% up to 250%6.3%8.05% 250% up to 300%8.05%9.5% 300% up to 400%9.5%9.5%. (ii) Indexing(I) In generalSubject to subclause (II), in the case of taxable years beginning in any calendar year after 2014, the initial and final applicable percentages under clause (i) (as in effect for the preceding calendar year after application of this clause) shall be adjusted to reflect the excess of the rate of premium growth for the preceding calendar year over the rate of income growth for the preceding calendar year.