October 11, 2021 1:22 am

Eligibility for the Premium Tax Credit in 2022

Planning ahead for health insurance for 2022? If you have affordable minimum essential health coverage from an employer or are covered by Medicare, you may not use the premium tax credit to help pay for your insurance. The IRS has clarified what “affordable” means for 2022 (Rev. Proc. 2021-36).

Affordable employer-sponsored minimum essential health coverage. This is employer coverage that does not require you to pay more than a set percentage of income toward premiums. For 2021,this percentage is 9.61% (down from 9.83% in 2021).

Share of premiums through the exchange. If you obtain health coverage from a government Marketplace and otherwise qualify for the premium tax credit, the maximum share of household income applied toward premiums in 2022 is 8.5%. This is the same limit that applied in 2021. Prior to 2021, those with household income exceeding 400% of the federal poverty line (FPL) were ineligible for any premium tax credit. The required contribution of household income for premiums in 2022 continues to be scaled so that those with household income of less than 150% of the FPL do not pay any premiums.

Tax Glossary

Hobby loss

Hobby expenses are deductible only up to income from the activity; loss deductions are not allowed.

More terms