If a taxpayer's income increases to 420% of the Federal poverty line, what must they do regarding the Premium Tax Credit?

When a taxpayer's income exceeds a certain threshold related to the Federal Poverty Line (FPL), it affects their eligibility for various tax credits, including the Premium Tax Credit (PTC). The Premium Tax Credit is designed to help individuals and families afford health insurance purchased through the Health Insurance Marketplace.

The eligibility for the PTC is based on the taxpayer's household income as a percentage of the FPL. Generally, individuals with household income between 100% and 400% of the FPL are eligible for the PTC. When a taxpayer's income rises to 420% of the FPL, they surpass the maximum limit for receiving this credit.

Consequently, once income exceeds the 400% threshold, the individual is no longer eligible for the Premium Tax Credit. This means they will not receive any tax credit assistance for their health insurance premiums, which could lead to higher out-of-pocket expenses for coverage. To ensure compliance, the individual must consider their options for health coverage without relying on the PTC.

In summary, once the income exceeds 400% of the FPL, losing eligibility for the Premium Tax Credit is a direct result of the established income thresholds linked to the program.