Application of premium tax credit in case of Medicaid coverage gap individuals

(a) In general Section 36B of the Internal Revenue Code of 1986 is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection: (h) Special rule for Medicaid coverage gap individuals (1) In general For purposes of this section, in the case of a taxpayer who is a Medicaid coverage gap individual for any month of a taxable year— (A) such taxpayer shall be treated for the taxable year as an applicable taxpayer whose household income for the taxable year is equal to 100 percent of the poverty line for a family of the size involved, and (B) the applicable percentage for such taxpayer for the taxable year shall be 0 percent. (2) Medicaid coverage gap individual defined For purposes of this subsection, the term Medicaid coverage gap individual means an individual— (A) who would be eligible for minimum essential coverage (as defined in section 5000A(f), determined without regard to paragraph (1)(C) thereof) but for the fact that the State in which such individual resides has not elected to provide medical assistance under the State Medicaid plan under title XIX of the Social Security Act (or a waiver of such plan) to all individuals described in section 1902(a)(10)(A)(i)(VIII) of such Act, and (B) whose household income for the taxable year is less than 100 percent of the poverty line for a family of the size involved. (3) Application of joint return requirement Paragraph (1)(A) shall not affect the application of subsection (c)(1)(C).. (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2026.