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October 12, 2022

IRS's final premium tax credit regulations base eligibility on cost of covering employee's family rather than just employee

The IRS has published final regulations (TD 9968) under IRC Section 36B addressing eligibility for the premium tax credit (PTC) to provide that affordability of employer-sponsored minimum essential coverage (employer coverage) for an employee's family members is determined based on the employee's share of the cost of covering the employee and those family members, not the cost of covering only the employee. Effective December 12, 2022, the regulations will affect taxpayers who enroll, or enroll a family member, in individual health insurance coverage through a Health Insurance Exchange and who may be allowed a PTC. (For background, see Tax Alert 2022-0582.) A Tax Alert is forthcoming.