Par. 4. Section 1.36B-3 is amended by: 1. Revising paragraph (c)(1); 2. Redesignating paragraph (c)(6) as paragraph (c)(8) and adding new paragraph (c)(6); 3. Adding paragraph (c)(7); 4. In newly redesignated paragraph (c)(8), designating Example 1 through Example 4 as paragraphs (c)(8)(i) through (iv), respectively. 5. In newly designated paragraph (c)(8)(i), redesignating paragraphs (c)(8)(i)(i) and (ii) as paragraphs (c)(8)(i)(A) and (B), respectively. 6. In newly designated paragraph (c)(8)(ii), redesignating paragraphs (c)(8)(ii)(i) and (ii) as paragraphs (c)(8)(ii)(A) and (B), respectively. 7. In newly designated paragraph (c)(8)(iii), redesignating paragraphs (c)(8)(iii)(i) and (ii) as paragraphs (c)(8)(iii)(A) and (B), respectively. 8. Redesignating paragraph (d)(2) as paragraph (d)(3), and adding new paragraph (d)(2); 9. In newly redesignated paragraph (d)(3), designating Example 1 through Example 3 as paragraphs (d)(3)(i) through (iii), respectively. 10. In newly designated paragraph (d)(3)(ii), redesignating paragraphs (d)(3)(ii)(i) through (d)(3)(ii)(iii) as paragraphs (d)(3)(ii)(A) through (d)(3)(ii)(C), respectively. 11. In newly designated paragraph (d)(3)(iii), removing the language “ Example 2 of this paragraph (d)(2)” and adding the language “paragraph (d)(3)(ii) of this section ( Example 2 )” in its place. 12. Revising paragraph (h); 13. Revising paragraphs (l)(1) and (l)(2)(i); and 14. Revising paragraph (n)(1), revising the first sentence of paragraphs (n)(2) and (3), and adding paragraphs (n)(5) and (6). The revisions and additions read as follows:
* * * * *
(c) * * *
(1) In general. Except as provided in paragraphs (c)(6) and (7) of this section, a month is a coverage month for an individual if—
(i) As of the first day of the month, the individual is enrolled in a qualified health plan through an Exchange;
(ii) The taxpayer pays the taxpayer's share of the premium for the individual's coverage under the plan for the month by the unextended due date for filing the taxpayer's income tax return for that taxable year, the full premium for the month is paid by advance credit payments, or the amount of the premium paid (including by advance credit payments) for the month is sufficient to avoid termination of the individual's coverage for that month under one of the scenarios described in paragraph (c)(4) of this section; and
(iii) The individual is not eligible for the full calendar month for minimum essential coverage (within the meaning of § 1.36B-2(c)) other than coverage described in section 5000A(f)(1)(C) (relating to coverage in the individual market).
* * * * *
(6) Verification requirements —(i) In general. A month is not a coverage month for an individual enrolled in a qualified health plan if the Exchange through which the individual enrolled fails to verify—
(A) Enrollment eligibility —
( 1 ) The individual's place of residence meets the applicable residency standard in 45 CFR 155.305(a)(3);
( 2 ) The individual is a U.S. citizen, a national of the U.S., or an alien lawfully present in the U.S.; and
(B) Advance credit payment eligibility. For individuals for whom advance credit payments are made—
( 1 ) The items in paragraph (c)(6)(i)(A) of this section;
( 2 ) The household income and family size of the taxpayer who is expected to file an income tax return for the year of coverage reconciling the advance credit payments for the individual's coverage with the premium tax credit allowed for the coverage;
( 3 ) That the individual is ineligible for minimum essential coverage, other than individual market coverage; and
( 4 ) If the individual is an alien lawfully present in the U.S., that the individual is an eligible alien as defined in section 36B(e)(2)(B).
(ii) Waiver of verification requirements. Paragraph (c)(6)(i) of this section does not apply for an individual's months of coverage in a qualified health plan in a plan year with respect to the applicable enrollment information described in paragraph (c)(6)(i) of this section provided during a special enrollment period that is triggered by an event described in 45 CFR 155.420(d)(2)(i) or (ii).
(7) Failure to reconcile status. A month is not a coverage month for an individual for whom advance credit payments were made for the individual's qualified health plan coverage if the Exchange through which the individual enrolled failed to comply with section 36B(c)(6) for the month.
* * * * *
(d) * * *
(2) Reduction for amounts allocable to individuals not lawfully present or not eligible aliens. In determining the premium assistance amount in paragraph (d)(1) of this section for a taxpayer, if any individual in the taxpayer's family who is enrolled in a qualified health plan is not lawfully present or is an alien lawfully present but not an eligible alien, as defined in section 36B(e)(2)(B), the taxpayer must reduce the enrollment premiums under paragraph (d)(1)(i) of this section and the adjusted monthly premium for the applicable benchmark plan under paragraph (d)(1)(ii) of this section by the portion of the premiums attributable to such individual.
* * * * *
(h) Plan covering more than one family under a single policy —(1) In general. If a qualified health plan covers more than one family under a single policy, each applicable taxpayer with a family member covered by the policy may claim a premium tax credit, if otherwise allowable. Each taxpayer computes the credit using that taxpayer's applicable percentage, household income, and the benchmark plan that applies to the taxpayer under paragraph (f) of this section. Except as provided in paragraph (h)(2) of this section, in determining whether the amount computed under paragraph (d)(1)(i) of this section (the enrollment premiums) is less than the amount computed under paragraph (d)(1)(ii) of this section (the benchmark plan premium minus the product of household income and the applicable percentage), the enrollment premiums are allocated to each taxpayer in proportion to the premiums for each taxpayer's applicable benchmark plan.
(2) Allocation if an individual is not lawfully present or not an eligible alien —(i) In general. Except as provided in paragraph (h)(2)(ii) of this section, if a qualified health plan covers more than one family under a single policy and one or more individuals covered by the policy is not lawfully present, or is a lawfully present alien but not an eligible alien, then this paragraph (h)(2)(i) is used to determine the portion of the enrollment premiums for the policy allocable to each taxpayer with a family member covered by the policy for purposes of determining whether the amount under paragraph (d)(1)(i) of this section is less than the amount under paragraph (d)(1)(ii) of this section, as adjusted by paragraph (d)(2) of this section. Under this paragraph (h)(2)(i), the portion of the enrollment premiums allocated to a taxpayer with a family member covered by the policy is the enrollment premiums for the policy multiplied by a fraction, the numerator of which is the taxpayer's applicable benchmark plan premium, excluding individuals covered by the policy who are not lawfully present or who are lawfully present aliens but not eligible aliens, and the denominator of which is the amount the applicable benchmark plan premium would be if all of the individuals covered by the policy were treated as members of one coverage family, including individuals enrolled in the plan who are not lawfully present or who are lawfully present aliens but not eligible aliens.
(ii) Allocation if an individual is not lawfully present or not an eligible alien and an individual is not in the coverage family. If a qualified health plan covers more than one family under a single policy and one or more individuals covered by the policy is not lawfully present, or is a lawfully present alien but not an eligible alien, and one or more individuals covered by the policy is not in a coverage family because, for example, the individual is eligible for minimum essential coverage, this paragraph (h)(2)(ii) is used to determine the portion of the enrollment premiums for the policy allocable to each taxpayer with a family member covered by the policy for purposes of determining whether the amount under paragraph (d)(1)(i) of this section is less than the amount under paragraph (d)(1)(ii) of this section as adjusted by paragraph (d)(2) of this section. For purposes of this paragraph (h)(2)(ii), the amount of the enrollment premium to be allocated (the net allocable premium) equals the enrollment premium for the policy multiplied by a fraction, the numerator of which is the amount the applicable benchmark plan premium would be if all of the individuals covered by the policy were treated as members of one coverage family, excluding individuals covered by the policy who are not lawfully present or who are lawfully present aliens but not eligible aliens, and the denominator of which is the amount the applicable benchmark plan premium would be if all of the individuals covered by the policy were members of one coverage family, including individuals covered by the policy who are not lawfully present or who are lawfully present aliens but not eligible aliens. The net allocable premium is then allocated to a taxpayer with a family member covered by the policy by multiplying the net allocable premium by a fraction, the numerator of which is the applicable benchmark plan premium for the taxpayer's coverage family, excluding individuals covered by the policy who are not lawfully present or who are lawfully present aliens but not eligible aliens, and the denominator of which is the amount the applicable benchmark plan premium would be if the members of the coverage families covered by the policy were treated as members of a single coverage family, excluding individuals covered by the policy who are not lawfully present or who are lawfully present aliens but not eligible aliens.
(3) Examples. The following examples illustrate the rules of this paragraph (h):
(i) Example 1. (A) Taxpayers A and B enroll in a qualified health plan under a single policy. B is A's 25-year old child who is not A's dependent. B has no dependents. The plan covers A, B, and A's two additional children who are A's dependents. The enrollment premium for the policy is $15,000. The applicable benchmark plan premium for A's coverage family of A and A's dependents is $12,000. The applicable benchmark plan premium for B's coverage family, which includes only B, is $6,000. A and B are applicable taxpayers and otherwise eligible to claim the premium tax credit.
(B) Under paragraph (h)(1) of this section, both A and B may claim a premium tax credit. A computes her credit using her household income, a family size of three, and a benchmark plan premium of $12,000. B computes his credit using his household income, a family size of one, and an applicable benchmark plan premium of $6,000.
(C) In determining whether the amount in paragraph (d)(1)(i) of this section (the enrollment premiums for the taxpayer) is less than the amount in paragraph (d)(1)(ii) of this section (the benchmark plan premium for the taxpayer minus the product of household income and the applicable percentage), the $15,000 enrollment premium for the policy is allocated to A and B in proportion to the premiums for their applicable benchmark plans. Thus, the portion of the enrollment premium allocated to A is $10,000 ($15,000 × $12,000/$18,000) and the portion allocated to B is $5,000 ($15,000 × $6,000/$18,000).
(ii) Example 2. (A) Taxpayers C and D enroll in a qualified health plan under a single policy. D is C's 25-year old child and is not C's dependent. The plan also covers C's spouse and D's child who is a dependent of D. C, D, and D's child are U.S. citizens and C's spouse is lawfully present in the U.S. but not an eligible alien as defined in section 36B(e)(2)(B). The enrollment premium for the policy is $14,000. The applicable benchmark plan premium for C's coverage family is $5,500, which under paragraph (d)(2) of this section does not include the cost of covering C's spouse because C's spouse is an alien lawfully present in the U.S. but not an eligible alien. The applicable benchmark plan premium for D's coverage family of D and D's child is $7,150. If all of the individuals enrolled in the plan were treated as members of one coverage family, the applicable benchmark plan premium including C's spouse, who is an alien lawfully present but not an eligible alien, would be $15,400. C and D are applicable taxpayers and otherwise eligible to claim the premium tax credit.
(B) Under paragraph (h)(1) of this section, both C and D may claim a premium tax credit. Because C's family and D's family are enrolled in the qualified health plan under a single policy and C's spouse, an alien lawfully present in the U.S. but not an eligible alien, is enrolled in the plan, paragraph (h)(2)(i) of this section applies to determine the enrollment premium for the policy C and D use in determining whether the amount in paragraph (d)(1)(i) of this section is less than the amount in paragraph (d)(1)(ii) of this section as adjusted by paragraph (d)(2) of this section. Under paragraph (h)(2)(i) of this section, C's enrollment premium is $5,000 ($14,000 × $5,500 (C's applicable benchmark plan premium)/$15,400 (the applicable benchmark plan premium for all of the individuals enrolled in the plan, including C's spouse, if treated as members of one coverage family)). Under paragraph (h)(2)(i) of this section, D's enrollment premium is $6,500 ($14,000 (enrollment premium for the plan) × $7,150 (D's applicable benchmark plan premium)/$15,400 (the applicable benchmark plan premium for all of the individuals enrolled in the plan, including C's spouse, if treated as members of one coverage family)).
(iii) Example 3. (A) The facts are the same as in paragraph (h)(3)(ii) of this section ( Example 2 ) except that D's child is eligible for minimum essential coverage and therefore not a member of D's coverage family. Thus, paragraph (h)(2)(ii) of this section applies to determine the enrollment premiums that C and D use in determining whether the amount in paragraph (d)(1)(i) of this section is less than the amount in paragraph (d)(1)(ii) of this section as adjusted by paragraph (d)(2) of this section. If all of the individuals enrolled in the plan were treated as members of one coverage family, the applicable benchmark plan premium, excluding individuals enrolled in the plan who are not lawfully present or who are lawfully present aliens but not eligible aliens, would be $12,650, which includes all individuals enrolled in the plan except C's spouse, who is an alien lawfully present in the U.S. but not an eligible alien. The applicable benchmark plan premium for D's coverage family is $4,400, which does not include the cost of covering D's child, who is eligible for minimum essential coverage and thus not includible in D's coverage family. If the members of the coverage families enrolled in the plan were treated as members of a single coverage family, the applicable benchmark plan premium, excluding individuals enrolled in the plan who are not lawfully present or who are lawfully present aliens but not eligible aliens, would be $9,900, which excludes both D's child and C's spouse.
(B) Under paragraph (h)(1) of this section, both C and D may claim premium tax credits. The net allocable premium for the plan is $11,500 ($14,000 (enrollment premium for the plan) × $12,650 (the applicable benchmark plan premium for all of the individuals enrolled in the plan, excluding C's spouse who is an alien lawfully present in the U.S. but not an eligible alien, if treated as members of one coverage family)/$15,400 (the applicable benchmark plan premium for all of the individuals enrolled in the plan, including C's spouse, if treated as members of one coverage family)). Under paragraph (h)(2)(ii) of this section, C's enrollment premium is $6,389 ($11,500 (net allocable enrollment premium) × $5,500 (C's applicable benchmark plan premium)/$9,900 (the total of C's and D's applicable benchmark plan premium)). Under paragraph (h)(2)(ii) of this section, D's enrollment premium is $5,111 ($11,500 × $4,400 (D's applicable benchmark plan premium)/$9,900 (the total of C's and D's applicable benchmark plan premiums)).
* * * * *
(l) * * *
(1) In general. If one or more individuals for whom a taxpayer is allowed a deduction under section 151 are not lawfully present (within the meaning of § 1.36B-1(g)) or, in the case of aliens who are lawfully present, are not eligible aliens, the percentage a taxpayer's household income bears to the Federal poverty line for the taxpayer's family size for purposes of determining the applicable percentage under paragraph (g) of this section is determined by excluding from family size individuals who are not lawfully present, or, in the case of aliens who are lawfully present, are not eligible aliens, and by determining household income in accordance with paragraph (l)(2) of this section.
(2) * * *
(i) Statutory method. For purposes of paragraph (l)(1) of this section, household income is equal to the product of the taxpayer's household income (determined without regard to this paragraph (l)(2)) and a fraction—
(A) The numerator of which is the Federal poverty line for the taxpayer's family size determined by excluding individuals who are not lawfully present or, in the case of aliens who are lawfully present, are not eligible aliens; and
(B) The denominator of which is the Federal poverty line for the taxpayer's family size determined by including individuals who are not lawfully present or, in the case of aliens who are lawfully present, are not eligible aliens.
* * * * *
(n) * * *
(1) Except as provided in paragraphs (n)(2) through (6) of this section, this section applies to taxable years ending after December 31, 2013.
(2) Paragraphs (d)(1) (except for paragraph (d)(1)(i)) and (d)(3) of this section apply to taxable years beginning after December 31, 2016. * * *
(3) Paragraphs (c)(4), (5), and (8) of this section apply to taxable years beginning on or after January 1, 2025. * * *
* * * * *
(5) Paragraphs (c)(6) and (7) of this section apply to taxable years beginning after December 31, 2027.
(6) Paragraphs (d)(2), (h), (l)(1), and (l)(2)(i) of this section apply to taxable years beginning after December 31, 2026. Paragraphs (h), (l)(1), and (l)(2)(i) of this section as contained in 26 CFR part 1 edition revised as of April 1, 2025, applies to taxable years ending after December 31, 2013, and beginning before January 1, 2027.