under section 36B, (ii) any cost-sharing reduction under section 1402 of the Patient Protection and Affordable Care Act, and (iii) any advance payment of such credit or reduction under section 1412 of such Act. (B) Exception with respect to certain low-income taxpayers Such term shall not include any premium tax credit, cost-sharing reduction, or advance payment otherwise described in subparagraph (A) if such credit, reduction, or payment is allowed or paid for a taxable year of an employee (beginning after December 31, 2023, and before January 1, 2027) with respect to which— (i) an Exchange established under title I of the Patient Protection and Affordable Care Act has determined that such employee’s household income for such taxable year is projected to not exceed 138 percent of the poverty line for a family of the size involved, or (ii) such employee’s household income for such taxable year does not exceed 138 percent of the poverty line for a family of the size involved. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 3. Closing the Medicaid coverage gap (a) Federal Medicaid program To close coverage gap in nonexpansion States Title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq. ) is amended by adding at the end the following new section: 1948. Federal Medicaid program to close coverage gap in nonexpansion States (a) Establishment In the case of a State that the Secretary determines (based on the State plan under this title, waiver of such plan, or other relevant information) is not expected to expend amounts under the State plan (or waiver of such plan) for all individuals described in section 1902(a)(10)(A)(i)(VIII) during a year (beginning with 2027) (in this section defined as a coverage gap State , with respect to such year), the Secretary shall (including through contract with eligible entities (as specified by the Secretary), consistent with subsection (b)) provide for the offering to such individuals residing in such