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California Differences - Premium Tax Credit

Individual Market Assistance (Government Code Sec 100800-100825) - SB 78, signed by the governor 6/27/2019, created a California Individual Market Assistance program that is authorized to provide health care coverage financial assistance, including advance premium assistance subsidies, to lawfully present California residents with household incomes at or below 138%, or above 200% but no more than 600% of the federal poverty level. The program began in 2020. (Gov Code Sec 100825(b))

The California premium assistance was designed to supplement the federal benefit and to cover individuals when their income exceeded 400% of the federal poverty level and up to 600% of the federal poverty level.  But with the federal government’s expansion of subsidies (i.e., the Premium Credit) in the American Rescue Plan and Inflation Reduction Acts, California’s assistance program is essentially obsolete for 2021 through 2025, and CA stopped providing subsidies.

If the CA subsidies are reinstated in the future, a California individual taking advantage of the advance assistance from the state will be required to file a California income tax return, even if their income is below the income-based filing requirement, to reconcile the advances with the actual amount allowed based on household income, family size, etc., and to repay any excess advances or receive a refund if the actual subsidy allowed exceeds the advances. 

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