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How do ACA marketplace subsidies work?

InvestingWarren Team

Quick answer

ACA premium tax credits cap your contribution toward a benchmark Silver plan at roughly 8.5% of MAGI through 2025 (the enhanced subsidy). You can take credits in advance to lower monthly premiums and the IRS reconciles them on Form 8962.

Sliding scale of ACA premium tax credits showing income-based contribution caps.

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