Enhanced tax credits now available through MNsure and the American Rescue Plan. See frequently asked questions.
If eligible for the premium tax credit, you can use it to lower your monthly insurance premium when you enroll in a private health insurance plan through MNsure. Premium tax credits can be applied to all private plans except catastrophic and stand-alone dental plans.
Who is Eligible?
To be eligible for the premium tax credit, you must not be eligible for public program coverage, and must not have access to affordable minimum essential coverage.
Use our estimator tool to get a quick estimate on your eligibility and potential savings.
To get an official eligibility determination, you must submit an "application WITH financial help."
How Tax Credits are Calculated
The amount of your premium tax credit is based on the income estimate and household information you put on your MNsure application, including:
- Your household’s total expected income for the year (projected annual income or PAI).
- The total number of people in your tax household that enroll in private health insurance through MNsure.
- The premium amount of the second-lowest cost silver plan available through MNsure in your area. This also called the “benchmark” plan. (You can choose to enroll in plans that cost more than the benchmark plan.)
- The maximum percentage of household income that can be spent on the cost of the benchmark plan's premiums. Under the new American Rescue Plan it is a maximum of 8.5% for plan years 2021 and 2022. (Before the American Rescue Plan it was a maximum of 9.83%.) See frequently asked questions about the expanded benefits through the American Rescue Plan.
Also, because of the expanded benefits under the American Rescue Plan, eligibility for tax credits is no longer limited by household income. Before the American Rescue Plan, households with incomes above 400% of the federal poverty guidelines were not eligible for tax credits. See the federal poverty guidelines based on family size.
Using Your Tax Credit
With some exceptions, you can use all, some, or none of your premium tax credit in advance to lower your monthly premium.
You can use the tax credit in two different ways:
- Save money now and get the financial help in advance (advanced premium tax credit, or "APTC") to lower your monthly premiums.*
- Save money later and wait until you file your federal taxes to get a premium tax credit ("PTC") added to your tax refund.
*Any enhanced tax credits you are eligible for through the American Rescue Plan but were not able to collect in advance will be provided to you by way of your tax return. These enhanced benefits are retroactive to your first date of coverage through MNsure in 2021.
Reporting Premium Tax Credits
If you enrolled in a plan with advanced premium tax credit you will need to file the IRS Form 8962 with your federal income tax return for that year and make sure the amount of tax credit you received in advance matches with the final premium tax credit calculation. This is called reconciling.
- If you use more advanced premium tax credit than you qualify for based on your final yearly income, you must repay the difference when you file your federal income tax return.
- If you use less advanced premium tax credit than you qualify for, you’ll get the difference as a refundable credit when you file your taxes.
- You can choose to claim the premium tax credit in one lump sum when you file your federal income tax return.
Learn more about Claiming or Reporting a Tax Credit.
See information about how to adjust your ATPC amount.