Extension of temporary enhanced premium credits

(a) In general Clause (iii) of section 36B(b)(3)(A) of the Internal Revenue Code of 1986 is amended— (1) by striking January 1, 2026 and inserting January 1, 2032, and (2) by striking 2025 in the heading and inserting 2031. (b) Household income limitation Section 36B(c)(1)(E) of the Internal Revenue Code of 1986 is amended— (1) by striking rule for 2021 through 2025.—In the case of and inserting the following: “ rules for 2021 through 2031.— (i) In general In the case of, and (2) by adding at the end the following new clause: (ii) Special rule for 2027 through 2031 In the case of any taxable year beginning after December 31, 2026, and before January 1, 2032, subparagraph (A) shall be applied by substituting 700 percent for 400 percent.. (c) Phasedown of enhanced amounts Subparagraph (A) of section 36B(b)(3) of the Internal Revenue Code of 1986 is amended by adding at the end the following new clause: (iv) Phasedown of enhanced amounts (I) In general In the case of a taxable year beginning after December 31, 2027, the premium assistance amount determined under this subsection (without regard to this clause) shall be reduced by an amount equal to the phasedown percentage of the enhanced amount. (II) Enhanced amount For purposes of subclause (I), the term enhanced amount means the excess, if any, of the premium assistance amount determined under this subsection (without regard to this clause) over the premium assistance amount which would be so determined if clause (iii) did not apply for the taxable year. (III) Phasedown percentage For purposes of subclause (I), the phasedown percentage is— (aa) 20 percent, in the case of a taxable year beginning after December 31, 2027, and before January 1, 2029, (bb) 40 percent, in the case of a taxable year beginning after December 31, 2028, and before January 1, 2030, (cc) 60 percent, in the case of a taxable year beginning after December 31, 2029, and before January 1, 2031, and (dd) 80 percent, in the case of a taxable year beginning after December 31, 2030, and before January 1, 2032.. (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.