Extension and modification of enhanced premium tax credit

(a) Extension and modification of rules To increase premium assistance amounts Section 36B(b)(3)(A)(iii) of the Internal Revenue Code of 1986 is amended— (1) by redesignating subclauses (I) and (II) as items (aa) and (bb), respectively, and adjusting the margins accordingly, (2) by striking Temporary percentages for 2021 through 2025.—In the case of and inserting Temporary rules for certain years.— (I) Before 2026 In the case of, and (3) by adding at the end the following: (II) After 2025 for taxpayers whose household income does not exceed 150 percent of poverty line In the case of a taxable year beginning after December 31, 2025, and before January 1, 2028, if any taxpayer’s household income does not exceed 150 percent of the poverty line for such taxable year, the premium assistance amount determined under subsection (b)(2), with respect to any coverage month, is the excess of the lesser of the amount described in paragraph (2)(A) or the amount described in paragraph (2)(B)(i), over $5. (III) After 2025 for taxpayers whose household income does not exceed 200 percent of poverty line In the case of a taxable year beginning after December 31, 2025, and before January 1, 2028, if any taxpayer’s household income exceeds 150 percent of the poverty line but does not exceed 200 percent of the poverty line for such taxable year, the premium assistance amount determined under subsection (b)(2), with respect to any coverage month, shall be such that the premium assistance amount for such a taxpayer shall decrease, on a sliding scale in a linear manner, from the amount that would result if determined in accordance with subclause (II) to the amount that would result under subsection (b)(2) by substituting 2 percent for the applicable percentage in subparagraph (B)(ii) thereof. (IV) After 2025 for taxpayers whose household income exceeds 200 percent of poverty line In the case of a taxable year beginning after December 31, 2025, and before January 1, 2028, if any taxpayer’s household income exceeds 200 percent of the poverty line for such taxable year— (aa) clause (ii) shall not apply for purposes of adjusting premium percentages under this subparagraph, and (bb) the following table shall be applied in lieu of the table contained in clause (i): In the case of household income (expressed as a percent of poverty line) within the following income tier: The initial premium percentage is- The final premium percentage is- 200% up to 250% 2.0% 4.0% 250% up to 300% 4.0% 6.0% 300% up to 400% 6.0% 8.5% 400% up to 600% 8.5% 8.5% 600% up to 700% 8.5% 9.25%. (b) Extension and modification of rule To allow credit to taxpayers whose household income exceeds 400 percent of poverty line Section 36B(c)(1)(E) of such Code is amended— (1) by striking Temporary rule for 2021 through 2025.—In the case of and inserting Temporary rule for certain years.— (i) Before 2026 In the case of, and (2) by adding at the end the following: (ii) After 2025 In the case of a taxable year beginning after December 31, 2025, and before January 1, 2028, subparagraph (A) shall be applied by substituting but does not exceed 700 percent for but does not exceed 400 percent.. (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.