Reviewed by Tina Price, licensed health insurance advisor, on October 30, 2026.

How the health insurance tax credit works in Colorado for 2027

For 2027, you can get the federal premium tax credit if your household income is 100% to 400% of the federal poverty level. It is based on the income you expect, and checked when you file your taxes.

Last updated October 30, 2026

The short version

The federal credit goes to households from 100% to 400% of the federal poverty level. Above 400%, there is no credit.
You can take the credit monthly in advance. It is checked against your real income when you file taxes on Form 8962.
Starting with tax year 2026, repayment caps are gone. If your real income ends up above 400%, you repay all of the credit you received.
Colorado Premium Assistance may lower your premium further. Connect for Health Colorado decides who qualifies.
Tax credits are available only through Connect for Health Colorado.

What the premium tax credit is

The premium tax credit lowers your monthly premium. It is based on your household and the income you expect in the year you are covered.

The federal poverty level (FPL) is an income amount the government sets by household size. For 2027 coverage, 400% of it is:

1 person: $63,840
2 people: $86,560
3 people: $109,280
4 people: $132,000

Above 400%, no credit

The extra subsidies that helped higher-income households in past years have ended. For 2027, a household above those amounts gets no credit at all, however high its premium.

Advance payments and tax time

You can use all, some, or none of your credit in advance each month. When you file your federal taxes, the credit you used is compared with the credit your actual income qualifies you for (on IRS Form 8962).

If you received more than you qualified for, you repay the difference. If you received less, the difference increases your refund or lowers what you owe.

Starting with tax year 2026, the caps on repayment are gone. If your actual income ends up above 400% of the poverty level, you repay all of the credit you used. For a household near the line, that can be thousands of dollars.

Estimating your income

Use your best estimate of income for the year you are covered, not last year's income. Include the income of everyone in your tax household.

If your income changes during the year, update your application with Connect for Health Colorado. A small update during the year is easier than a large repayment later.

If your income sits close to the 400% line, talk to a tax professional before you decide how much credit to take in advance.

Colorado Premium Assistance

Colorado Premium Assistance is a state program, not a tax credit. If you qualify, it comes off your bill automatically when you enroll through Connect for Health Colorado.

For 2027, the state rule sets the help at about $70 a month for the first person. Each additional person who pays a premium adds about $25. It is applied after the federal credit, for households at or below 400% of the federal poverty level. Connect for Health Colorado decides who qualifies and shows your amount when you apply.

Cost-sharing reductions

Cost-sharing reductions lower your deductible, copays, and out-of-pocket costs. You get them only if you qualify and choose a silver plan.

For incomes up to 250% of the federal poverty level, enhanced silver plans pay about 73%, 87%, or 94% of costs, depending on income. These plans can be worth a look even if the monthly premium is higher.

Why it matters where you buy

Only plans bought through Connect for Health Colorado can get the credit. A plan bought directly from an insurance company cannot, even at tax time.

Next step

Your credit depends on your income, household size, and county. Our comparison estimates it; Connect for Health Colorado shows the exact amount when you apply.

Want a person to check your pick? A licensed Grove advisor will, at no cost.

Compare plans Call (970) 840-1130

Common questions

Can I take the credit at tax time instead of monthly?

Yes. You can use all, some, or none of the credit in advance. If you use none, you claim the whole credit when you file. Taking less in advance lowers the chance of owing money back.

What if my income goes up during the year?

Report the change to Connect for Health Colorado as soon as you can. Your advance credit is adjusted. Staying under 400% for the year is what keeps you from repaying all of it.

Does the credit apply to every plan?

It applies to plans bought through Connect for Health Colorado by people who qualify. It does not apply to off-exchange plans.

Sources

This guide is general information, not tax or legal advice. Connect for Health Colorado decides eligibility and tax credits.

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