2017 Premium Tax Credit
For 2017, the Premium Tax Credit is 2.04% (Lowest applicable percentage) and 9.69% (Highest applicable percentage).
Effective 2017-01-01Source: Rev. Proc. 2016-24 (IRS)Verified 2026-08-29
Compared with 2016
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Lowest applicable percentage | 2.03% | 2.04% | +0.01% (+0.5%) |
| Highest applicable percentage | 9.66% | 9.69% | +0.03% (+0.3%) |
Who it applies to
Anyone claiming the premium tax credit for a taxable year beginning in 2017 uses this table. Household income as a share of the Federal poverty line picks the band; the applicable percentage for that band is the share of household income the taxpayer is expected to pay towards the benchmark plan, and the credit makes up the rest. That expected share is 2.04% at the bottom of the schedule and 9.69% in the highest band the table covers. It is not the required contribution percentage, which the same revenue procedure states separately and which is about employer-sponsored coverage.
What changed this year, and why
Rev. Proc. 2016-24 indexes the applicable percentage table under § 36B for taxable years beginning in 2017. The lowest band moved from 2.03% to 2.04%, and the highest band the table covers moved from 9.66% to 9.69%. The shape of the table is unchanged: the same income bands, each with an initial and a final percentage, and those two equal only at the bottom of the schedule and in the top band.
Common questions
- What is the premium tax credit applicable percentage for 2017?
- For taxable years beginning in 2017 the applicable percentage table under § 36B runs from 2.04% in the lowest household income band to 9.69% in the highest band the table covers. Every band in between carries an initial and a final percentage.
- How did the applicable percentage table change from 2016 to 2017?
- Both ends of the schedule rose slightly. The lowest band went from 2.03% to 2.04% and the highest band the table covers went from 9.66% to 9.69%. The band boundaries themselves did not change.
- Does a higher applicable percentage mean a smaller credit?
- Yes. The applicable percentage is the share of household income a taxpayer is expected to contribute towards the benchmark plan, and the credit is what is left of the benchmark premium after that contribution. Raising the percentage raises the expected contribution and lowers the credit for the same premium.
- Where is the 2017 table published?
- In Rev. Proc. 2016-24, issued by the IRS. It provides the applicable percentage table for taxable years beginning in 2017 for the purposes of § 36B and indexes it using the methodology described in Rev. Proc. 2014-37.
Who counts as an applicable taxpayer
You must file Form 8962 with your 2017 income tax return if any of three conditions apply: you are claiming the Premium Tax Credit, advance credit payments were made for you or someone in your tax family, or advance payments were made for an individual you told the Marketplace you would claim as a dependent but no one actually claims. Even if your income is too low to normally require filing, you must submit a return and attach Form 8962. You cannot use Form 1040EZ or the simplified nonresident forms. If someone else enrolled a member of your tax family and received advance payments for that person, you still must file to reconcile those payments.
You must file Form 8962 with your income tax return (Form 1040, Form 1040A, or Form 1040NR) if any of the following apply to you. You are taking the PTC. APTC was paid for you or another individual in your tax family. APTC was paid for an individual (including you) for whom you told the Marketplace you would claim a personal exemption and neither you nor anyone else claims a personal exemption for that individual.
2017 Instructions for Form 8962, Premium Tax Credit (IRS)
Household income is not the same as your AGI
Household income for the Premium Tax Credit is not simply your adjusted gross income. It equals the modified adjusted gross income of you and your spouse if filing jointly, plus the modified adjusted gross income of each dependent who must file a return because their income exceeds the filing threshold. Modified adjusted gross income starts with the adjusted gross income shown on your return and adds back certain untaxed amounts: foreign earned income, tax-exempt interest, and the nontaxable portion of social security benefits. Dependents who file only to claim a refund of withheld or estimated tax are excluded from household income. This broader measure determines whether your income falls between the lowest applicable percentage and the highest applicable percentage of the federal poverty line and sets the rate used to calculate your credit.
For purposes of the PTC, household income is the modified adjusted gross income (modified AGI) of you and your spouse (if filing a joint return) (see Line 2a, later) plus the modified AGI of each individual whom you claim as a dependent and who is required to file an income tax return because his or her income meets the income tax return filing threshold (see Line 2b, later).
2017 Instructions for Form 8962, Premium Tax Credit (IRS)
The second lowest cost silver plan sets the credit
The applicable second lowest cost silver plan premium is the premium for the second lowest cost silver plan offered through the Marketplace in your area that covers your coverage family. This amount, not your actual enrollment premium, determines the benchmark used to calculate your Premium Tax Credit. Form 1095-A, Part III, column B, generally reports this figure, but it may be wrong or blank if no advance credit was paid or if you had unreported changes in circumstances during the year. Your monthly credit equals the difference between the applicable second lowest cost silver plan premium and your monthly contribution amount, which is the portion of household income you would pay toward premiums at the applicable percentage rate ranging from the lowest applicable percentage to the highest applicable percentage of income.
The applicable SLCSP premium is the second lowest cost silver plan premium offered through the Marketplace where you reside that applies to your coverage family (described earlier).
2017 Instructions for Form 8962, Premium Tax Credit (IRS)
Paying back advance credit, and the cap on it
If advance credit payments exceed the credit you are entitled to based on your actual income, you must repay the excess. The repayment amount may be limited by Table 5 caps based on your household income as a percentage of the federal poverty line. For taxpayers filing separately who were married at year end, the repayment limitations apply to each spouse separately based on the household income shown on each return. However, if your household income exceeds certain levels above the federal poverty line, the cap does not apply and you must repay all excess advance payments. Certain situations involving the Health Coverage Tax Credit also remove the limitation. The capped repayment amounts protect lower-income taxpayers from owing the full difference when their income was estimated incorrectly at enrollment.
The excess APTC you must repay may be limited to the amounts in Table 5 next. Enter the appropriate amount from Table 5 on line 28. If you were married at the end of 2017 but are filing separately from your spouse, the repayment limitations shown in Table 5 apply to you and your spouse separately based on the household income reported on each return.
2017 Instructions for Form 8962, Premium Tax Credit (IRS)
Filing separately usually disqualifies you
If you were considered married for federal income tax purposes at the end of 2017, you generally must file a joint return with your spouse to qualify as an applicable taxpayer and claim the Premium Tax Credit. Filing as married filing separately disqualifies you unless you meet specific exceptions. One exception allows married persons living apart to file as head of household or single if they meet requirements for married persons who live apart. Another exception permits victims of domestic abuse or spousal abandonment to file separately and still claim the credit, provided they are living apart from their spouse, cannot file jointly due to the abuse or abandonment, certify this on Form 8962, and have not used this exception for three consecutive prior years. If you file separately without meeting either exception, you are not an applicable taxpayer and cannot take the credit.
Married taxpayers. If you are considered married for federal income tax purposes, you must file a joint return with your spouse to take the PTC unless one of the two exceptions below applies to you.
2017 Instructions for Form 8962, Premium Tax Credit (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2016-24 (IRS)
- Lowest applicable percentage
Initial percentage Final percentage Less than 133% 2.04% 2.04%
- Highest applicable percentage
At least 300% but not more than 400% 9.69% 9.69%