What the credit is, mechanically
Marketplace plans have a sticker price set by the carrier and approved by the state. The premium tax credit is a federal subsidy that covers the difference between that price and a percentage of your income that the law says you should pay for a benchmark plan. The benchmark is the second-lowest-cost silver plan available where you live.
Three consequences follow. The credit is personal: two neighbors on the same plan pay different amounts because their incomes differ. The credit is portable across metal levels: it is calculated against the silver benchmark and then applied to whichever plan you pick, so a bronze plan can end up nearly free and a gold plan costs the full difference. And the credit is provisional: it is paid on an estimate and settled on your tax return.
How income sets the credit
The income that counts is modified adjusted gross income for the tax household, projected for the coverage year. The credit formula turns that into a percentage of the poverty level and asks you to pay a share of income that rises with that percentage.
Under the enhanced rules that ran from 2021 through 2025, that expected share started at 0% for the lowest incomes and was capped at 8.5% at every income, with no upper limit. Those rules expired on December 31, 2025. For 2026 and 2027 the credit runs on the pre-2021 formula: the expected share starts above 2% at the bottom and rises to just under 10% near 400% of the poverty level, and at incomes above 400% there is generally no credit at all.
In 2026 dollars, the lines look like this:
| Household | 200% Essential Plan ceiling | 250% credit shrinking | 300% credit shrinking | 400% credit generally ends |
|---|---|---|---|---|
| 1 | $31,920 | $39,900 | $47,880 | $63,840 |
| 2 | $43,280 | $54,100 | $64,920 | $86,560 |
| 3 | $54,640 | $68,300 | $81,960 | $109,280 |
| 4 | $66,000 | $82,500 | $99,000 | $132,000 |
| 5 | $77,360 | $96,700 | $116,040 | $154,720 |
| 6 | $88,720 | $110,900 | $133,080 | $177,440 |
Each additional person adds $5,680 to 100% FPL. Annual figures, before taxes.
Below 200% of the poverty level, for adults 19 to 64, the answer in New York is usually not a marketplace plan at all but the Essential Plan, at $0 and with no season.
Advance payment, and the reconciliation that follows
You do not pay the full premium and wait for a refund. You tell NY State of Health what you expect to earn, the marketplace computes a credit, and the credit is paid each month to the carrier. Your bill is the remainder.
After the year ends, the marketplace sends a statement showing what was paid on your behalf, and your federal return recalculates the credit you were actually entitled to on your actual income. Earned less than projected: you were undercredited and the difference comes back in your refund. Earned more: you were overcredited and you repay.
What changed in 2026: federal law removed the cap on that repayment. Through 2025, households under 400% of the poverty level repaid at most a fixed amount, a few hundred to a few thousand dollars depending on income. From the 2026 tax year onward, the full excess is owed. A household that projected $40,000, earned $58,000 and took a large advance credit all year can owe several thousand dollars in April.
Two defenses, both boring. Estimate on the high side if income is unpredictable, since overestimating only delays money you get back. And report income changes when they happen, so the advance credit is recalculated forward instead of discovered at filing.
Who can receive it
Citizens and lawfully present immigrants, with income in the credit’s range, who are not eligible for other affordable coverage such as Medicaid, the Essential Plan or an affordable employer plan.
The immigrant rules narrowed in two steps under the federal law enacted in July 2025. From January 1, 2026, lawfully present immigrants with income under 100% of the poverty level lost eligibility. From January 1, 2027, the credit is limited to lawful permanent residents, certain Cuban and Haitian entrants, and citizens of the Compact of Free Association nations. Refugees, asylees, people with Temporary Protected Status and other lawfully present categories can still buy a marketplace plan, at full price, but cannot receive the credit. What stays open for those households.
A second 2025 change: enrollees must have their eligibility verified before enrolling each year, which means the marketplace will ask for income documentation rather than carrying last year’s forward.
Cost-sharing reductions: the other subsidy
Households between 100% and 250% of the poverty level who pick a silver plan also get cost-sharing reductions: lower deductibles and copays built into the plan. This help is invisible on a premium comparison and can be worth more than the premium credit for someone who uses care. The question to ask NY State of Health: “Do I qualify for cost-sharing reductions, and which silver plans carry them?”
Where this page stops
We do not print the exact percentage-of-income table for 2027, because it is indexed annually and a stale table is worse than a link. NY State of Health’s plan preview shows your credit for your county and household, and that number, not any table, is the one to decide on.
Questions people ask
Is the premium tax credit a loan?
No. It is a subsidy, settled against your actual income when you file. You owe money back only if the advance payments exceeded what your final income entitled you to.
Can I take less credit in advance?
Yes. You can choose to take part of the credit monthly and collect the rest at tax time. Almost nobody does, and it is the cleanest protection against a repayment surprise if income may rise.
My income is just above 400% of the poverty level. Is there anything?
Not from the federal credit under current rules. Check the estimate first: pre-tax retirement and HSA contributions and deductible self-employment expenses reduce the income that counts. If the household is genuinely above the line, compare plans on sticker price and network, and know that hospital financial assistance still caps charges up to 400% and applies to insured patients whose out-of-pocket costs exceed 10% of income.
Does the credit count against a green card application?
Health coverage other than long-term institutional care is not part of the public charge analysis. For a pending case, ask an immigration attorney about your own facts; the city funds free immigration legal services.
Sources
- Congressional Research Service — Enhanced premium tax credit and 2026 exchange premiums (R48290) (checked 2026-09-07)
- NY State of Health (checked 2026-09-07)
- HHS 2026 Poverty Guidelines (Federal Register, January 15, 2026) (checked 2026-08-12)
This page explains how the system works. It is not medical advice. More.