 |
United States Code (Last Updated: May 24, 2014) |
 |
Title 26. INTERNAL REVENUE CODE |
|
SubTitle A. Income Taxes |
|
Chapter 1. NORMAL TAXES AND SURTAXES |
|
SubChapter A. Determination of Tax Liability |
|
Part IV. CREDITS AGAINST TAX |
|
SubPart C. Refundable Credits |
§ 36B. Refundable credit for coverage under a qualified health plan
-
(a) In general In the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year.
(b) Premium assistance credit amount For purposes of this section— (1) In general The term “premium assistance credit amount” means, with respect to any taxable year, the sum of the premium assistance amounts determined under paragraph (2) with respect to all coverage months of the taxpayer occurring during the taxable year.
(2) Premium assistance amount The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of— (A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act for any plan year, the portion of the premium for the plan described in such section that (under regulations prescribed by the Secretary) is properly allocable to pediatric dental benefits which are included in the essential health benefits required to be provided by a qualified health plan under section 1302(b)(1)(J) of such Act shall be treated as a premium payable for a qualified health plan. (c) Definition and rules relating to applicable taxpayers, coverage months, and qualified health plan For purposes of this section— (1) Applicable taxpayer (A) In general The term “applicable taxpayer” means, with respect to any taxable year, a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved.
(B) Special rule for certain individuals lawfully present in the United States If— (i) a taxpayer has a household income which is not greater than 100 percent of an amount equal to the poverty line for a family of the size involved, and (ii) the taxpayer is an alien lawfully present in the United States, but is not eligible for the medicaid program under title XIX of the Social Security Act by reason of such alien status, the taxpayer shall, for purposes of the credit under this section, be treated as an applicable taxpayer with a household income which is equal to 100 percent of the poverty line for a family of the size involved. (C) Married couples must file joint return If the taxpayer is married (within the meaning of section 7703) at the close of the taxable year, the taxpayer shall be treated as an applicable taxpayer only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year.
(D) Denial of credit to dependents No credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.
(2) Coverage month For purposes of this subsection— (A) In general The term “coverage month” means, with respect to an applicable taxpayer, any month if— (i) as of the first day of such month the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer is covered by a qualified health plan described in subsection (b)(2)(A) that was enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act, and (ii) the premium for coverage under such plan for such month is paid by the taxpayer (or through advance payment of the credit under subsection (a) under section 1412 of the Patient Protection and Affordable Care Act). (B) Exception for minimum essential coverage (i) In general The term “coverage month” shall not include any month with respect to an individual if for such month the individual is eligible for minimum essential coverage other than eligibility for coverage described in section 5000A(f)(1)(C) (relating to coverage in the individual market).
(ii) Minimum essential coverage The term “minimum essential coverage” has the meaning given such term by section 5000A(f).
(C) Special rule for employer-sponsored minimum essential coverage For purposes of subparagraph (B)— (i) Coverage must be affordable Except as provided in clause (iii), an employee shall not be treated as eligible for minimum essential coverage if such coverage— (I) consists of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)), and (II) the employee’s required contribution (within the meaning of section 5000A(e)(1)(B)) with respect to the plan exceeds 9.5 percent of the applicable taxpayer’s household income. This clause shall also apply to an individual who is eligible to enroll in the plan by reason of a relationship the individual bears to the employee. (ii) Coverage must provide minimum value Except as provided in clause (iii), an employee shall not be treated as eligible for minimum essential coverage if such coverage consists of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)) and the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs.
(iii) Employee or family must not be covered under employer plan Clauses (i) and (ii) shall not apply if the employee (or any individual described in the last sentence of clause (i)) is covered under the eligible employer-sponsored plan or the grandfathered health plan.
(iv) Indexing In the case of plan years beginning in any calendar year after 2014, the Secretary shall adjust the 9.5 percent under clause (i)(II) in the same manner as the percentages are adjusted under subsection (b)(3)(A)(ii).
(3) Definitions and other rules (A) Qualified health plan The term “qualified health plan” has the meaning given such term by section 1301(a) of the Patient Protection and Affordable Care Act, except that such term shall not include a qualified health plan which is a catastrophic plan described in section 1302(e) of such Act.
(B) Grandfathered health plan The term “grandfathered health plan” has the meaning given such term by section 1251 of the Patient Protection and Affordable Care Act.
(d) Terms relating to income and families For purposes of this section— (1) Family size The family size involved with respect to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year.
(2) Household income (A) Household income The term “household income” means, with respect to any taxpayer, an amount equal to the sum of— (i) the modified adjusted gross income of the taxpayer, plus (ii) the aggregate modified adjusted gross incomes of all other individuals who— (I) were taken into account in determining the taxpayer’s family size under paragraph (1), and (II) were required to file a return of tax imposed by section 1 for the taxable year. (B) Modified adjusted gross income The term “modified adjusted gross income” means adjusted gross income increased by— (i) any amount excluded from gross income under section 911, (ii) any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax, and (iii) an amount equal to the portion of the taxpayer’s social security benefits (as defined in section 86(d)) which is not included in gross income under section 86 for the taxable year. (3) Poverty line (A) In general The term “poverty line” has the meaning given that term in section 2110(c)(5) of the Social Security Act (42 U.S.C. 1397jj(c)(5)).
(B) Poverty line used In the case of any qualified health plan offered through an Exchange for coverage during a taxable year beginning in a calendar year, the poverty line used shall be the most recently published poverty line as of the 1st day of the regular enrollment period for coverage during such calendar year.
(e) Rules for individuals not lawfully present (1) In general If 1 or more individuals for whom a taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year (including the taxpayer or his spouse) are individuals who are not lawfully present— (A) the aggregate amount of premiums otherwise taken into account under clauses (i) and (ii) of subsection (b)(2)(A) shall be reduced by the portion (if any) of such premiums which is attributable to such individuals, and (B) for purposes of applying this section, the determination as to what percentage a taxpayer’s household income bears to the poverty level for a family of the size involved shall be made under one of the following methods: (i) A method under which— (I) the taxpayer’s family size is determined by not taking such individuals into account, and (II) the taxpayer’s household income is equal to the product of the taxpayer’s household income (determined without regard to this subsection) and a fraction— (aa) the numerator of which is the poverty line for the taxpayer’s family size determined after application of subclause (I), and (bb) the denominator of which is the poverty line for the taxpayer’s family size determined without regard to subclause (I). (ii) A comparable method reaching the same result as the method under clause (i). (2) Lawfully present For purposes of this section, an individual shall be treated as lawfully present only if the individual is, and is reasonably expected to be for the entire period of enrollment for which the credit under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States.
(3) Secretarial authority The Secretary of Health and Human Services, in consultation with the Secretary, shall prescribe rules setting forth the methods by which calculations of family size and household income are made for purposes of this subsection. Such rules shall be designed to ensure that the least burden is placed on individuals enrolling in qualified health plans through an Exchange and taxpayers eligible for the credit allowable under this section.
(f) Reconciliation of credit and advance credit (1) In general The amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the amount of any advance payment of such credit under section 1412 of the Patient Protection and Affordable Care Act.
(2) Excess advance payments (A) In general If the advance payments to a taxpayer under section 1412 of the Patient Protection and Affordable Care Act for a taxable year exceed the credit allowed by this section (determined without regard to paragraph (1)), the tax imposed by this chapter for the taxable year shall be increased by the amount of such excess.
(B) Limitation on increase (i) In general In the case of a taxpayer whose household income is less than 400 percent of the poverty line for the size of the family involved for the taxable year, the amount of the increase under subparagraph (A) shall in no event exceed the applicable dollar amount determined in accordance with the following table (one-half of such amount in the case of a taxpayer whose tax is determined under section 1(c) for the taxable year):
If the household income (expressed as a percent of poverty line) is:
The applicable dollar amount is:
Less than 200%
$600
At least 200% but less than 300%
$1,500
At least 300% but less than 400%
$2,500.
(ii) Indexing of amount In the case of any calendar year beginning after 2014, each of the dollar amounts in the table contained under clause (i) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting “calendar year 2013” for “calendar year 1992” in subparagraph (B) thereof. If the amount of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. (3) Information requirement Each Exchange (or any person carrying out 1 or more responsibilities of an Exchange under section 1311(f)(3) or 1321(c) of the Patient Protection and Affordable Care Act) shall provide the following information to the Secretary and to the taxpayer with respect to any health plan provided through the Exchange: (A) The level of coverage described in section 1302(d) of the Patient Protection and Affordable Care Act and the period such coverage was in effect. (B) The total premium for the coverage without regard to the credit under this section or cost-sharing reductions under section 1402 of such Act. (C) The aggregate amount of any advance payment of such credit or reductions under section 1412 of such Act. (D) The name, address, and TIN of the primary insured and the name and TIN of each other individual obtaining coverage under the policy. (E) Any information provided to the Exchange, including any change of circumstances, necessary to determine eligibility for, and the amount of, such credit. (F) Information necessary to determine whether a taxpayer has received excess advance payments. (g) Regulations The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations which provide for— (1) the coordination of the credit allowed under this section with the program for advance payment of the credit under section 1412 of the Patient Protection and Affordable Care Act, and (2) the application of subsection (f) where the filing status of the taxpayer for a taxable year is different from such status used for determining the advance payment of the credit.
References In Text
Sections 1251, 1301, 1302, 1311, 1321, 1402, and 1412 of the Patient Protection and Affordable Care Act, referred to in text, are classified to sections 18011, 18021, 18022, 18031, 18041, 18071, and 18082, respectively, of Title 42, The Public Health and Welfare.
Sections 2701 and 2705(d) of the Public Health Service Act, referred to in subsec. (b)(3)(C), are classified to sections 300gg and 300gg–4(d), respectively, of Title 42, The Public Health and Welfare. The reference to section 2705(d) probably should be a reference to section 2705(l), which relates to wellness program demonstration project and is classified to section 300gg–4(l) of Title 42.
Section 1311(d)(2)(B)(ii)(I) of the Patient Protection and Affordable Care Act, referred to in subsec. (b)(3)(E), probably means section 1311(d)(2)(B)(ii) of Pub. L. 111–148, which is classified to section 18031(d)(2)(B)(ii) of Title 42, The Public Health and Welfare, and which does not contain subclauses.
The Social Security Act, referred to in subsec. (c)(1)(B)(ii), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Title XIX of the Act is classified generally to subchapter XIX (§ 1396 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables.
Amendments
2011—Subsec. (c)(2)(D). Pub. L. 112–10 struck out subpar. (D). Prior to amendment, text read as follows: “The term ‘coverage month’ shall not include any month in which such individual has a free choice voucher provided under section 10108 of the Patient Protection and Affordable Care Act.”
Subsec. (d)(2)(B)(iii). Pub. L. 112–56 added cl. (iii).
Subsec. (f)(2)(B)(i). Pub. L. 112–9 amended cl. (i) generally. Prior to amendment, cl. (i) consisted of text and a table limiting increase in amount recovered on reconciliation of health insurance tax credit and advance of that credit for households with income below 500 percent of Federal poverty line.
2010—Subsec. (b)(3)(A)(i). Pub. L. 111–152, § 1001(a)(1)(A), substituted “for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier:” for “with respect to any taxpayer for any taxable year is equal to 2.8 percent, increased by the number of percentage points (not greater than 7) which bears the same ratio to 7 percentage points as—” in introductory provisions, inserted table, and struck out subcls. (I) and (II) which read as follows:
“(I) the taxpayer’s household income for the taxable year in excess of 100 percent of the poverty line for a family of the size involved, bears to
“(II) an amount equal to 200 percent of the poverty line for a family of the size involved.”
Subsec. (b)(3)(A)(ii). Pub. L. 111–152, § 1001(a)(1)(B), added cl. (ii) and struck out former cl. (ii). Text read as follows: “If a taxpayer’s household income for the taxable year equals or exceeds 100 percent, but not more than 133 percent, of the poverty line for a family of the size involved, the taxpayer’s applicable percentage shall be 2 percent.”
Pub. L. 111–148, § 10105(a), substituted “equals or exceeds” for “is in excess of”.
Subsec. (b)(3)(A)(iii). Pub. L. 111–152, § 1001(a)(1)(B), struck out cl. (iii). Text read as follows: “In the case of taxable years beginning in any calendar year after 2014, the Secretary shall adjust the initial and final applicable percentages under clause (i), and the 2 percent under clause (ii), for the calendar year to reflect the excess of the rate of premium growth between the preceding calendar year and 2013 over the rate of income growth for such period.”
Subsec. (c)(1)(A). Pub. L. 111–148, § 10105(b), inserted “equals or” before “exceeds”.
Subsec. (c)(2)(C)(i)(II). Pub. L. 111–152, § 1001(a)(2)(A), substituted “9.5 percent” for “9.8 percent”.
Subsec. (c)(2)(C)(iv). Pub. L. 111–152, § 1001(a)(2), substituted “9.5 percent” for “9.8 percent” and “(b)(3)(A)(ii)” for “(b)(3)(A)(iii)”.
Pub. L. 111–148, § 10105(c), substituted “subsection (b)(3)(A)(iii)” for “subsection (b)(3)(A)(ii)”.
Subsec. (c)(2)(D). Pub. L. 111–148, § 10108(h)(1), added subpar. (D).
Subsec. (d)(2)(A)(i), (ii). Pub. L. 111–152, § 1004(a)(1)(A), substituted “modified adjusted gross” for “modified gross”.
Subsec. (d)(2)(B). Pub. L. 111–152, § 1004(a)(2)(A), amended subpar. (B) generally. Prior to amendment, text read as follows: “The term ‘modified gross income’ means gross income—
“(i) decreased by the amount of any deduction allowable under paragraph (1), (3), (4), or (10) of section 62(a),
“(ii) increased by the amount of interest received or accrued during the taxable year which is exempt from tax imposed by this chapter, and
“(iii) determined without regard to sections 911, 931, and 933.”
Subsec. (f)(2)(B). Pub. L. 111–309, § 208(a), amended generally subpar. heading and cl. (i). Prior to amendment, text of cl. (i) read as follows: “In the case of an applicable taxpayer whose household income is less than 400 percent of the poverty line for the size of the family involved for the taxable year, the amount of the increase under subparagraph (A) shall in no event exceed $400 ($250 in the case of a taxpayer whose tax is determined under section 1(c) for the taxable year).”
Subsec. (f)(2)(B)(ii). Pub. L. 111–309, § 208(b), inserted “in the table contained” after “each of the dollar amounts” in introductory provisions.
Subsec. (f)(3). Pub. L. 111–152, § 1004(c), added par. (3).
Effective Date Of Amendment
Pub. L. 112–56, title IV, § 401(b),
Pub. L. 112–10, div. B, title VIII, § 1858(d),
Pub. L. 112–9, § 4(b),
Pub. L. 111–309, title II, § 208(c),
Pub. L. 111–148, title X, § 10108(h)(2),
Effective Date
Pub. L. 111–148, title I, § 1401(e),
Miscellaneous
Pub. L. 112–56, title IV, § 401(c),