IRS Provides 2025 Indexing Adjustments for Premium Tax Credit

Supplements Rev. Proc. 2014-37

Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.105: Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability.

(Also Part 1, §§36B, 1.36B-2, 1.36B-3.)

SECTION 1. PURPOSE

This revenue procedure provides the applicable percentage table (Applicable Percentage Table) in §36B(b)(3)(A) of the Internal Revenue Code (Code)¹ for taxable years beginning in calendar year 2025.² This table is used to calculate an individual's premium tax credit under §36B. This revenue procedure also provides the indexing adjustment for the required contribution percentage (Required Contribution Percentage) in §36B(c)(2)(C)(i)(II) for plan years beginning in calendar year 2025. This percentage is used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage under §36B.

SECTION 2. ADJUSTED ITEMS

.01 Applicable Percentage Table for 2025. For taxable years beginning in calendar year 2025, the Applicable Percentage Table for purposes of §36B(b)(3)(A) and §1.36B-3(g) is:

.02 Required Contribution Percentage for 2025.

(1) Section 9661 of the ARPA and §12001(a) of the IRA did not amend the rules under §36B(c)(2)(C)(iv) relating to the Required Contribution Percentage, including the rules relating to the indexing of the Required Contribution Percentage. See §36B(b)(3)(A)(iii)(I). The Required Contribution Percentage for plan years beginning in calendar year 2025 is indexed based on the rates of premium growth relative to the rates of income growth in guidance issued by the Department of Health and Human Services (HHS).³ In addition, the additional adjustment provided in §36B(b)(3)(A)(ii)(II) is not required for plan years beginning in 2025 because the Department of the Treasury and the Internal Revenue Service have determined that the failsafe exception described in §36B(b)(3)(A)(ii)(III) applies for plan years beginning in calendar year 2025.

(2) For plan years beginning in calendar year 2025, the Required Contribution Percentage for purposes of §36B(c)(2)(C)(i)(II) and §1.36B-2(c)(3)(v)(C) is 9.02%.

SECTION 3. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2014-37, 2014-2 C.B. 363, is supplemented.

SECTION 4. EFFECTIVE DATE

This revenue procedure is effective for taxable years and plan years beginning in calendar year 2025.

SECTION 5. DRAFTING INFORMATION

The principal author of this revenue procedure is Clara L. Raymond of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue procedure, contact Ms. Raymond at (202) 317-4718 (not a toll-free call).