Extending Enhanced PTC

Congress enhanced the existing premium tax credit (PTC) pursuant to the COVID-era American Rescue Plan Act of 2022. The tax credits serve to reduce the health care premiums for qualifying taxpayers. The credits are paid directly to health insurance providers, rather than to the taxpayer, in exchange for the reduced premiums. The enhanced credits provide increased subsidies for taxpayers who already qualify for the PTC absent the enhancement. They also extend PTC eligibility to taxpayers with annual income that equals 400% of the federal poverty line. Taxpayers with income under 150% of the federal poverty level generally pay nothing for health insurance coverage. Taxpayers with income of $60,240 or more pay no more than 8.5% of their household income for their health insurance premiums. These enhanced PTCs were extended through 2025 via the Inflation Reduction Act of 2022.

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about whether Congress should act to extend the enhanced premium tax credits.

Below is a summary of the debate that ensued between the two professors.