2020 Premium Tax Credit
For 2020, the Premium Tax Credit is 2.06% (Lowest applicable percentage) and 9.78% (Highest applicable percentage).
Effective 2020-01-01Source: Rev. Proc. 2019-29 (IRS)Verified 2026-08-29
Compared with 2019
| Item | 2019 | 2020 | Change |
|---|---|---|---|
| Lowest applicable percentage | 2.08% | 2.06% | -0.02% (-1.0%) |
| Highest applicable percentage | 9.86% | 9.78% | -0.08% (-0.8%) |
Who it applies to
The table applies to anyone claiming the premium tax credit for a taxable year beginning in 2020. Household income as a share of the Federal poverty line decides the band; the applicable percentage for that band is the share of household income the taxpayer is expected to put towards the benchmark plan, and the credit covers the remainder of that premium. The expected share is 2.06% at the bottom of the schedule and 9.78% in the highest band the table covers.
What changed this year, and why
Rev. Proc. 2019-29 indexes the applicable percentage table under § 36B for taxable years beginning in 2020. Both ends of the schedule eased back: the lowest band from 2.08% to 2.06% and the highest band the table covers from 9.86% to 9.78%. The indexing uses the methodology in Rev. Proc. 2014-37 together with the Department of Health and Human Services notice of benefit and payment parameters for the year.
Common questions
- What is the premium tax credit applicable percentage for 2020?
- For taxable years beginning in 2020 the applicable percentage table under § 36B runs from 2.06% in the lowest household income band to 9.78% in the highest band the table covers.
- How did the table change from 2019 to 2020?
- It fell slightly at both ends, from 2.08% to 2.06% at the bottom of the schedule and from 9.86% to 9.78% in the highest band the table covers.
- Is this the same as the affordability percentage for employer coverage?
- No. The applicable percentage table sizes the premium tax credit itself. The required contribution percentage, which the same revenue procedure states separately, decides only whether an offer of employer-sponsored coverage counts as affordable.
- Where is the 2020 table published?
- In Rev. Proc. 2019-29, issued by the IRS, which provides the applicable percentage table for taxable years beginning in 2020 for the purposes of § 36B.
Who counts as an applicable taxpayer
You must file Form 8962 with your income tax return (Form 1040, 1040-SR, or 1040-NR) 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 you told the Marketplace would be in your tax family and neither you nor anyone else included that individual in a tax family. See Individual you enrolled who is not included in a tax family under Lines 12 Through 23 - Monthly Calculation, later.
You must file Form 8962 with your income tax return (Form 1040, 1040-SR, or 1040-NR) 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 you told the Marketplace would be in your tax family and neither you nor anyone else included that individual in a tax family.
2020 Instructions for Form 8962, Premium Tax Credit (IRS)
Household income is not the same as your AGI
For Premium Tax Credit purposes, household income is defined more broadly than the adjusted gross income on your tax return. It is the modified adjusted gross income of you and your spouse, if you file a joint return, plus the modified adjusted gross income of each dependent you claim who must file a return because his or her income meets the filing threshold. Modified adjusted gross income means the adjusted gross income shown on your return plus certain amounts not subject to tax, such as foreign earned income, tax-exempt interest, and the non-taxable portion of social security benefits. Household income does not include the modified adjusted gross income of dependents who file a return only to claim a refund of withheld or estimated tax. This broader measure determines whether your income falls within the range that qualifies for the credit and, if so, which applicable percentage between the lowest of 2.06% and the highest of 9.78% is used to figure your monthly contribution toward premiums.
Household income does not include the modified AGI of those individuals whom you claim as dependents and who are filing a 2020 return only to claim a refund of withheld income tax or estimated tax.
2020 Instructions for Form 8962, Premium Tax Credit (IRS)
The second lowest cost silver plan sets the credit
The benchmark plan used to figure your Premium Tax Credit is the second lowest cost silver plan available through the Marketplace in the rating area where you live. This is the plan whose premium sets the ceiling for calculating your monthly credit amount; it is not necessarily the plan you actually enrolled in. The applicable second lowest cost silver plan premium is determined for your coverage family, which includes all members of your tax family enrolled in a qualified health plan. You will generally find this amount reported on Form 1095-A, Part III, column B, but that figure can be wrong or blank if no advance credit was paid or if you had a change in circumstances you did not report to the Marketplace during the year. In those cases you must determine the correct applicable premium yourself rather than relying on the form as printed.
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).
2020 Instructions for Form 8962, Premium Tax Credit (IRS)
Paying back advance credit, and the cap on it
If the advance credit payments you received during the year exceed the credit you are actually entitled to based on your income, you generally must repay the difference. However, the law caps that repayment at fixed amounts that depend on your household income as a percentage of the federal poverty line. Taxpayers with lower incomes face smaller caps, and the cap rises as income rises within the qualifying range. For 2020 the applicable percentages used in the credit formula range from a lowest of 2.06% to a highest of 9.78%, and those percentages determine what portion of income you are expected to contribute toward premiums before the credit fills the gap to the benchmark plan. If your income exceeds the top of the qualifying range, there is no cap and you must repay all excess advance payments.
The excess APTC you must repay may be limited to the amounts in Table 5. Enter the appropriate amount from Table 5 on line 28.
2020 Instructions for Form 8962, Premium Tax Credit (IRS)
Filing separately usually disqualifies you
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. The first exception covers certain married persons who live apart and qualify to file as head of household or as single on a nonresident return. The second exception covers victims of domestic abuse or spousal abandonment who are living apart from their spouse at the time they file; they may use the married filing separately status and still claim the credit. If neither exception applies and you file as married filing separately, you are not an applicable taxpayer and you cannot take the credit at all. You must also generally repay all of the advance credit paid for coverage of individuals in your tax family, or half of the advance credit if the policy also covered at least one individual in your spouse's tax family.
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.
2020 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. 2019-29 (IRS)
- Lowest applicable percentage
Initial percentage Final percentage Less than 133% 2.06% 2.06%
- Highest applicable percentage
At least 300% but not more than 400% 9.78% 9.78%