ACA Premium Subsidy Calculator
The Affordable Care Act premium tax credit lowers what you pay for Marketplace health coverage. The credit is the difference between the benchmark plan premium (the second-lowest-cost silver plan in your area) and the amount you are expected to contribute, which is your household income multiplied by an applicable percentage tied to your income level. This calculator takes your annual benchmark premium, your household income, and the applicable percentage, computes your expected contribution, and subtracts it from the benchmark to estimate your annual and monthly premium tax credit. The credit can never exceed the benchmark premium.
Premium tax credit formula
Expected contribution = income * (applicable percentage / 100)
Raw credit = benchmark premium - expected contribution
Credit = max(0, raw credit)
Monthly credit = credit / 12
Net monthly cost = (benchmark premium / 12) - monthly credit
The applicable percentage rises with income relative to the federal poverty level. Use the official schedule for your coverage year and the benchmark premium specific to your area and household.
US ACA subsidy context
- The credit is tied to the second-lowest-cost silver plan but may be applied to any metal-level Marketplace plan.
- The applicable-percentage schedule is set by regulation each year and depends on income as a share of the federal poverty level.
- Advance payments of the credit go directly to your insurer to lower monthly premiums.
- You reconcile advance credits against your actual income on IRS Form 8962 at tax time.
- Cost-sharing reductions are a separate benefit and are not modelled by this premium-credit calculator.
ACA subsidy: frequently asked questions
How is the ACA premium tax credit calculated?
The premium tax credit equals the cost of the second-lowest-cost silver plan (the benchmark plan) in your area minus your expected contribution. Your expected contribution is your household income times an applicable percentage that rises with income. The credit cannot be more than the benchmark premium.
What is the benchmark plan?
The benchmark is the second-lowest-cost silver plan available to your household through the Marketplace. The credit is tied to this plan, but you can apply it to any metal-level plan you choose. Find your benchmark premium on HealthCare.gov or your state exchange.
What is the applicable percentage?
It is the share of household income you are expected to pay toward the benchmark plan. It is set on a sliding scale tied to income relative to the federal poverty level. Because the schedule is updated annually by regulation, this calculator lets you enter the applicable percentage as a user-editable input.
Can the credit exceed the benchmark premium?
No. The premium tax credit is capped at the benchmark premium amount. If your expected contribution is equal to or greater than the benchmark premium, your credit is zero. This calculator floors the credit at zero.
Is this the same as my actual subsidy?
This is an estimate. Your actual advance premium tax credit depends on verified income, household size, the official applicable-percentage schedule for the year, and your benchmark premium. Reconcile the credit on your tax return using IRS Form 8962.
Official sources
- U.S. Centers for Medicare & Medicaid Services: HealthCare.gov.
- Internal Revenue Service: IRS home (Premium Tax Credit, Form 8962).
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.