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What is a premium tax credit?

The Affordable Care Act provides a new tax credit to help you afford health coverage purchased through Maryland Health Connection. If your income is 400% of the federal poverty level or less, you may qualify for a premium tax credit.

Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premium each month, up to a maximum amount. If the amount of advance credit payments you get for the year is less than the tax credit you're due, you’ll get the difference as a refundable credit when you file your federal income tax return. If your advance payments for the year are more than the amount of your credit, you must repay the excess advance payments with your tax return.