2025 Premium Tax Credit
For 2025, the Premium Tax Credit figures are 0% (Lowest applicable percentage) and 8.5% (Highest applicable percentage).
Effective 2025-01-01Source: Rev. Proc. 2024-35 (IRS)Verified 2026-09-02
Compared with 2024
Every figure on this page is unchanged from 2024.
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Lowest applicable percentage | 0% | 0% | +0% |
| Highest applicable percentage | 8.5% | 8.5% | +0% (+0.0%) |
Who it applies to
Anyone claiming the premium tax credit for a taxable year beginning in 2025 uses this table. Household income as a share of the Federal poverty line selects the band, and the band's applicable percentage is the share of household income the taxpayer is expected to contribute towards the benchmark plan, with the credit covering the rest. That expected contribution is 0% at the bottom of the schedule and 8.5% in the top band. Because indexing is suspended, these are the same figures as the year before.
What changed this year, and why
For taxable years beginning in 2025 the applicable percentage table under § 36B is unchanged again: 0% in the lowest household income band, 8.5% in a top band with no upper income limit. Rev. Proc. 2024-35 states it and records that the table enacted by the American Rescue Plan Act, and extended by the Inflation Reduction Act, suspends indexing through this year. 2025 is the last year that table covers.
Common questions
- What is the premium tax credit applicable percentage for 2025?
- For taxable years beginning in 2025 the applicable percentage table under § 36B starts at 0% in the lowest household income band and reaches 8.5% in the top band, which has no upper income limit.
- Did the applicable percentage table change from 2024 to 2025?
- No. Indexing of the table is suspended for this period, so the schedule that applied for taxable years beginning in 2024 applies again for 2025, from 0% at the bottom to 8.5% at the top.
- Is 2025 the last year of this table?
- Yes. Rev. Proc. 2024-35 records that § 36B suspends indexing of the applicable percentage table through taxable year 2025. From the following year the table is indexed again, on different income bands.
- Where is the 2025 table published?
- In Rev. Proc. 2024-35, issued by the IRS, which provides the applicable percentage table for taxable years beginning in 2025 for the purposes of § 36B.
Who counts as an applicable taxpayer
You must file Form 8962 with your federal income tax return if any one of three conditions is met. First, you are claiming the premium tax credit for yourself. Second, advance payments of the credit were made on your behalf or for another member of your tax family. Third, advance payments were made for an individual you told the Marketplace to include in your tax family, but neither you nor anyone else counted that person in a tax family. Filing the form reconciles the advance amounts with the credit you are actually entitled to based on your income and family size for the year. If none of these situations apply, you do not need to attach Form 8962 to your return.
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.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
Household income is not the same as your AGI
For the premium tax credit, household income is not simply the adjusted gross income shown 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 their own income meets the filing threshold. Modified adjusted gross income starts with the AGI on your return and then adds back certain untaxed amounts, such as foreign earned income, tax-exempt interest, and the nontaxable portion of social security benefits. Dependents whose only reason to file is to get a refund of withheld or estimated tax are excluded from household income. Because of these additions, your household income for credit purposes can be higher than the AGI figure you see on your return, which affects both your eligibility and the percentage of income you are expected to pay toward premiums.
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 their income meets the income tax return filing threshold (see Line 2b, later).
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
The second lowest cost silver plan sets the credit
Your premium tax credit is based on the cost of a benchmark plan rather than the plan you actually enrolled in. The benchmark is the second lowest cost silver plan available through the Marketplace in your area that covers your coverage family. This amount, called the applicable SLCSP premium, is used to figure the maximum credit you can receive for the month, regardless of which metal level or specific plan you chose. If you enrolled in a plan that costs more than the benchmark, you pay the difference out of pocket. If you enrolled in a plan that costs less, your credit is limited to the actual enrollment premium. Form 1095-A, Part III, column B, generally reports this amount, but it may be wrong or blank if no advance payments were made or if you had unreported changes in circumstances. In those cases, you must look up the correct benchmark premium yourself.
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).
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
Paying back advance credit, and the cap on it
When advance payments of the premium tax credit exceed the credit you are actually entitled to based on your final income, the excess must be repaid. However, for taxpayers whose household income is below 400% of the federal poverty line, the repayment amount is capped at a fixed dollar limit rather than the full excess. The cap depends on your income as a percentage of the poverty line and your filing status. Taxpayers with income at or above 400% of the poverty line face no cap and must repay the entire excess. For those below that threshold, Table 5 sets specific maximum repayment amounts for single filers and for all other filing statuses. If you were married at the end of 2025 but filed separately, the repayment limitation applies to each spouse separately based on the household income reported on each return. The repayment limitation is entered on Form 8962, line 28, and the amount you actually owe is the smaller of the full excess or the capped amount.
If your entry on Form 8962, line 5, is 400 or more, there is no repayment limitation. You must repay the amount shown on line 27. Leave line 28 blank and enter the amount from line 27 on line 29.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
Filing separately usually disqualifies you
If you are considered married for federal income tax purposes, you generally must file a joint return with your spouse to take the premium tax credit. The instructions describe two exceptions to this joint-return requirement. The first exception covers certain married persons who live apart from their spouse and qualify to file as head of household or, on a nonresident return, as single; those taxpayers may take the credit on a separate return. The second exception covers victims of domestic abuse or spousal abandonment, who may take the credit while using a married filing separately status. If neither exception applies and you file a separate return, you are not an applicable taxpayer and cannot claim the credit. Moreover, if advance credit payments were made for your coverage while you were married at the close of the year and no exception applies, you must repay the full amount of those advance payments. These two exceptions exist so that taxpayers who cannot safely or practically file jointly are not barred from 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.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
A change in income or family should be reported right away, not held for tax time
When your income or family situation changes during 2025, you should report these changes to the Marketplace right away rather than waiting until you file your tax return. If advance payments of the premium tax credit are being made for you or your family members, reporting changes promptly allows the Marketplace to adjust your advance payment amount to match the credit you are actually estimated to be able to claim on your return. Changes that should be reported include changes in household income, moving to a different address, gaining or losing other health coverage, employment changes, birth or adoption, marriage or divorce, and other changes affecting your tax family composition. Adjusting your advance payments throughout the year helps prevent you from owing additional tax when you file your return.
Report changes in circumstances when you re-enroll in coverage and during the year.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
APTC forces a return even when your income wouldn't otherwise require one
The premium tax credit has a filing requirement that applies even when your income would not normally require you to file a tax return. If advance payments of the premium tax credit (APTC) were made on your behalf, or if you are claiming the credit on your return, you must file an income tax return and attach Form 8962 regardless of how low your income is. This requirement exists because the IRS needs to reconcile the advance payments that were made during the year against the actual credit you are entitled to based on your final household income and family size. Without this reconciliation form, the IRS cannot determine whether you received too much or too little in advance payments. Failing to file could result in the IRS disallowing the credit or assessing additional tax for excess advance payments.
If any of the circumstances above apply to you, you must file an income tax return and attach Form 8962 even if you are not otherwise required to file.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
An affordable QSEHRA from your employer can wipe out the credit for that month
If your employer offers a qualified small employer health reimbursement arrangement (QSEHRA) that is considered affordable for any month during 2025, you are not eligible for the premium tax credit for that month. The credit is completely disallowed for any month where the QSEHRA meets the affordability test. If the QSEHRA is unaffordable for a month, you can still claim the premium tax credit, but you must reduce the monthly credit amount by the monthly permitted benefit from the QSEHRA. This coordination rule prevents individuals from receiving both the full premium tax credit and an affordable employer-sponsored reimbursement arrangement for the same coverage period.
If the QSEHRA is affordable for a month, no PTC is allowed for the month.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
A wrong benchmark premium on your Form 1095-A does not excuse using it
If you have reason to believe the Marketplace reported an incorrect second lowest cost silver plan premium on your Form 1095-A, you cannot simply use the incorrect amount shown on the form. You are required to determine the correct applicable second lowest cost silver plan premium for every month of 2025. This responsibility falls on you, the taxpayer, even though the Marketplace is supposed to provide accurate information. The correct premium amount is essential for calculating your premium tax credit, as it serves as the benchmark premium used to determine how much credit you are entitled to based on your household income.
if you have reason to believe the Marketplace reported the wrong applicable SLCSP premium, you must determine the correct applicable SLCSP premium
2025 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. 2024-35 (IRS)
- Lowest applicable percentage
Initial percentage Final percentage Less than 150% 0.00% 0.00%
- Highest applicable percentage
At least 400% and higher 8.50% 8.50%