High performance under low supply voltage is required for ULSIs in combination with the higher packing density that results from scaling down to the deep sub-micron region. For this requirement, the conventional method, using the DC hot carrier lifetime of MOSFETs as measured by DC stress, overestimates the degradation caused by real circuit operation. As a result, the improvement of MOSFET performance is limited by attempting to satisfy the overestimated hot carrier criteria under DC stress. Therefore, it is strongly desired that the reliability simulation estimate accurately hot carrier degradation in real circuit operation. We have found that the degradation rate depends on the stress conditions and can be expressed in terms of the difference between the gate and drain voltages. Hence, in this paper, we propose a new method of modeling and calculation of hot carrier degradation that incorporates this dependence and will demonstrate improved accuracy in predicting degradation and life time for both AC and DC bias conditions. We also propose a new duty ratio extraction method that can be used to predict the lifetime for hot carrier degradation under actual circuit operation.