To get your tax credit, you'll first need to fill out an application on the Health Insurance Marketplace. Then you'll get an estimate of the amount of credit you can claim for the coming year. The amount of credit you can get is based on:

  • Your family size
  • Your estimate of your household income for the coming year
  • The average price of plans in your area for a family similar to yours

The larger your family and the lower your income, the more credit you may be eligible for.

Then, you'll decide how to use your credit. This subsidy is called the Advanced Premium Tax Credit because you can choose to have all or some of it paid in advance toward your premium. The Marketplace notifies your insurance company about your credit, and reimburses them. Your insurance company applies the credit to your premium each month, so your payments are lower.

You can also wait to claim your credit when you file your tax return for the year you were covered by your plan. If you only applied part of it to your premium, you can claim the unused portion when you file, too. It's the difference between getting the credit as a lump sum, or paying less in premiums each month. It's up to you.