2027 Premium Tax Credit
For 2027, the Premium Tax Credit is 2.15% (Lowest applicable percentage) and 10.22% (Highest applicable percentage).
Effective 2027-01-01Source: Rev. Proc. 2026-26 (IRS)Verified 2026-09-01
Compared with 2026
| Item | 2026 | 2027 | Change |
|---|---|---|---|
| Lowest applicable percentage | 2.1% | 2.15% | +0.05% (+2.4%) |
| Highest applicable percentage | 9.96% | 10.22% | +0.26% (+2.6%) |
Who it applies to
Individuals and families who purchase health insurance through the Marketplace and qualify for the Premium Tax Credit under IRC § 36B for taxable years beginning in calendar year 2027.
What changed this year, and why
The IRS published the 2027 Applicable Percentage Table used to calculate the Premium Tax Credit under § 36B. The table sets the caps on what eligible households pay toward health insurance premiums, with the credit covering the remainder.
Common questions
- What are the applicable percentages for 2027?
- For taxable years beginning in calendar year 2027, the lowest applicable percentage is 2.15% and the highest applicable percentage is 10.22%.
- How do the 2027 percentages compare with 2026?
- Both the lowest and highest applicable percentages increased for 2027. The lowest rose from 2.1% in 2026 to 2.15% in 2027, and the highest rose from 9.96% in 2026 to 10.22% in 2027.
Who counts as an applicable taxpayer
An applicable taxpayer for the Premium Tax Credit (PTC) is someone who must file Form 8962 with their income tax return (Form 1040, 1040-SR, or 1040-NR) if any of the following conditions apply: they are taking the PTC; advance premium tax credit (APTC) was paid for them or another individual in their tax family; or APTC was paid for an individual they told the Marketplace would be in their tax family and neither they nor anyone else included that individual in a tax family. If any of these circumstances apply, the taxpayer must file an income tax return and attach Form 8962 even if they are not otherwise required to file. They cannot file Form 1040-SS. If someone else enrolled an individual in the taxpayer's tax family in coverage and APTC was paid for that individual's coverage, the taxpayer must file Form 8962 to reconcile the APTC. However, if the taxpayer is claimed as a dependent on another person's tax return, the person who claims them will file Form 8962 to take the PTC and repay excess APTC if necessary, and the dependent does not need to file Form 8962.
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
Household income for the Premium Tax Credit is not the same as your adjusted gross income (AGI). Instead, it is the modified adjusted gross income (modified AGI) of you and your spouse (if filing a joint return), plus the modified AGI of each dependent who is required to file a tax return because their income meets the filing threshold. Modified AGI is your AGI plus certain untaxed income such as foreign earned income, tax-exempt interest, and the non-taxable portion of social security benefits. Importantly, household income does not include the modified AGI of dependents who file a return only to claim a refund of withheld or estimated tax. This means that even if your AGI is below the federal poverty line, adding certain untaxed income or the income of dependents could push your household income above it, affecting your eligibility for the credit.
Household income. 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 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
The premium tax credit is based on the cost of a specific plan called the second lowest cost silver plan (SLCSP). This is the silver-level plan with the second-lowest premium offered through the Marketplace in your area that covers your tax family. Your credit amount is calculated using this benchmark plan's premium, not the premium you actually pay for your enrollment plan. If you happen to enroll in the SLCSP itself, then your enrollment premium equals the benchmark premium, but in most cases they differ. Form 1095-A, Part III, column B, reports the applicable SLCSP premium, though it may be wrong or blank if you had unreported changes in circumstances or if no advance credit was paid. The difference between the benchmark premium and your required contribution (based on your household income and the applicable percentage, which ranges from the lowest of 2.15% to the highest of 10.22%) determines your monthly credit amount.
Applicable SLCSP premium. 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
If you receive advance payments of the premium tax credit and your household income turns out to be higher than expected, you must repay some or all of those advance payments when you file your tax return. However, the repayment amount is subject to a cap based on your household income as a percentage of the federal poverty line. If your household income is below 400% of the federal poverty line, your repayment is limited to a specific amount from a table that varies by filing status. If your household income is 400% or more of the federal poverty line, there is no repayment limitation and you must repay the full amount of advance credit you received. This cap protects taxpayers with lower incomes from having to repay large amounts if their income increases during the year, while those with higher incomes bear the full responsibility for any excess advance payments.
If your entry on Form 8962, line 5, is 400 or more, there is no repayment limitation.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
Filing separately usually disqualifies you
If you are married at the end of the tax year, you generally must file a joint return with your spouse to be eligible for the premium tax credit. This requirement applies even if you and your spouse lived apart during the year. Filing a separate return usually disqualifies you from claiming the credit. However, the IRS provides two exceptions. The first exception is for married persons living apart who qualify to file as head of household, meaning you lived apart from your spouse for the last half of the year, maintained a household for a qualifying child, and meet the related requirements. The second exception is for victims of domestic abuse or spousal abandonment. If either exception applies, you may take the credit without filing jointly. If neither exception applies, you cannot take the premium tax credit unless you and your spouse file a joint return together.
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)
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. 2026-26 (IRS)
- Lowest applicable percentage
Initial percentage Final percentage Less than 133% 2.15% 2.15%
- Highest applicable percentage
At least 300% but not more than 400% 10.22% 10.22%