What changed?
If you take the premium tax credit in advance, the marketplace sends it to your insurer each month based on the income you expect. When you file your taxes, you compare those advance payments with the credit you actually qualify for, using Form 8962.
Through tax year 2025, repayment limits capped how much many people had to pay back. The IRS says those limits no longer apply starting with tax year 2026, so you repay the full difference.
How does the repayment work?
| At tax time, if | What happens |
|---|---|
| Your advance payments were less than your final credit | You get the difference as a bigger refund or a smaller tax bill. |
| Your advance payments were more than your final credit | You pay back the full difference. Starting with tax year 2026, there is no cap. |
| Your household income for the year is above 400% of the federal poverty level | You qualify for no credit, so you pay back all of the advance payments. |
For example, if $4,000 was paid to your insurer during the year and your final credit is $2,500, you owe the $1,500 difference with your tax return.
Which changes should I report to the marketplace?
- Changes in household income
- A move to a new address
- Starting, losing or changing a job
- Gaining or losing other health coverage, or becoming eligible for it
- A birth or adoption
- Marriage or divorce
- Any other change in who is part of your tax household
Report changes as soon as they happen. The marketplace then adjusts your monthly credit, which lowers the chance of a big bill at tax time.
How can I lower the risk of owing money?
- Estimate your income for the whole year, including self-employment, side work, bonuses and expected raises.
- Update your marketplace application whenever your income or household changes, not just at renewal.
- Use less of the credit in advance. HealthCare.gov lets you use all, some or none of your credit each month, and you get any credit you did not use when you file.
- Ask a tax professional for help if your income is hard to predict.
Which tax years does this affect?
The change starts with tax year 2026, the return most people file in early 2027, and applies to later years too. Returns for tax year 2025 and earlier keep the old repayment limits.
See our Individual & Family plans
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