Advanced Premium Tax Credit

Acronym: APTC

Is a credit in the Patient Protection and Affordable Care Act. The tax credits are not like regular tax credits that must be calculated and applied to the taxpayer’s tax liability and either refunded or used to reduce liability when taxes are filed for the previous year. In contrast, the Advanced Premium Tax Credit is calculated and sent directly from the government to the health insurance companies that insure individuals who are eligible for the credit. The individual gets a discount on monthly premium payments in the amount of the tax credit. Anyone eligible for this tax credit receives an amount determined by income. Those who make more will receive a smaller credit and a smaller monthly discount, while those with less income will receive larger credits and a larger discount on healthcare premiums. Because this tax credit is a direct payment, individuals who receive it do not pay the full amount of their monthly health insurance premium up front, but can pay the discounted amount. The qualifications for the Advanced Premium Tax Credit are that the subscriber is ineligible for either Medicaid or the Children’s Health Insurance Program (CHIP), ineligible for employer-sponsored health insurance, and have a modified adjusted gross income (AGI) of between 100% and 400% of the federal poverty level. Sections 1401 of the Patient Protection and Affordable Care Act (PPACA) established the Advance Payments of the Premium Tax Credit (APTC) program to lower the monthly premium for eligible individuals. See, [https://regtap.cms.gov/reg_library_video.php?id=5670](https://regtap.cms.gov/reg_library_video.php?id=5670)