Temporary expansion of health insurance premium tax credits for certain low-income populations

(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) Certain temporary rules beginning in 2026 With respect to any taxable year beginning after December 31, 2025, and before January 1, 2029— (1) Eligibility for credit not limited based on income Subsection (c)(1)(A) shall be applied without regard to equals or exceeds 100 percent but. (2) Credit allowed to certain low-income employees offered employer-provided coverage In the case of an individual whose household income does not exceed 138 percent of the poverty line for a family of the size involved, clause (i) of subsection (c)(2)(C) shall be applied (including in the case of any individual described in the last sentence of such clause) without regard to subclause (II) thereof. (3) Credit allowed to certain low-income employees offered qualified small employer health reimbursement arrangements A qualified small employer health reimbursement arrangement shall not be treated as constituting affordable coverage for an employee (or any spouse or dependent of such employee) for any months of a taxable year if the employee’s household income for such taxable year does not exceed 138 percent of the poverty line for a family of the size involved. (4) Limitations on recapture (A) In general In the case of a taxpayer whose household income is less than 200 percent of the poverty line for the size of the family involved for the taxable year, the amount of the increase under subsection (f)(2)(A) shall in no event exceed $300 (one-half of such amount in the case of a taxpayer whose tax is determined under section 1(c) for the taxable year). (B) Limitation on increase for certain non-filers In the case of any taxpayer who would not be required to file a return of tax for the taxable year but for any requirement to reconcile advance credit payments under subsection (f), if an Exchange established under title I of the Patient Protection and Affordable Care Act has determined that— (i) such taxpayer is eligible for advance payments under section 1412 of such Act for any portion of such taxable year, and (ii) such taxpayer’s household income for such taxable year is projected not to exceed 138 percent of the poverty line for a family of the size involved, subsection (f)(2)(A) shall not apply to such taxpayer for such taxable year and such taxpayer shall not be required to file such return of tax. (C) Information provided by Exchange The information required to be provided by an Exchange to the Secretary and to the taxpayer under subsection (f)(3) shall include such information as is necessary to determine whether such Exchange has made the determinations described in clauses (i) and (ii) of subparagraph (B) with respect to such taxpayer.. (b) Employer shared responsibility provision not applicable with respect to certain low-Income taxpayers receiving premium assistance Section 4980H(c)(3) of the Internal Revenue Code of 1986 is amended to read as follows: (3) Applicable premium tax credit and cost-sharing reduction (A) In general The term applicable premium tax credit and cost-sharing reduction means— (i) any premium tax credit allowed under section 36B, (ii) any cost-sharing reduction under section 1402 of the Patient Protection and Affordable Care Act, and (iii) any advance payment of such credit or reduction under section 1412 of such Act. (B) Exception with respect to certain low-income taxpayers Such term shall not include any premium tax credit, cost-sharing reduction, or advance payment otherwise described in subparagraph (A) if such credit, reduction, or payment is allowed or paid for a taxable year of an employee (beginning after December 31, 2025, and before January 1, 2029) with respect to which— (i) an Exchange established under title I of the Patient Protection and Affordable Care Act has determined that such employee’s household income for such taxable year is projected to not exceed 138 percent of the poverty line for a family of the size involved, or (ii) such employee’s household income for such taxable year does not exceed 138 percent of the poverty line for a family of the size involved.. (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.