What changed about premium tax credit repayment?
The premium tax credit is paid in advance, each month, from an income estimate. At tax time, Form 8962 settles it against your actual income. When the advance credit was too big, the excess is added to your federal tax (26 U.S.C. 36B(f)).
Until 2025, households under 400% of the poverty line repaid at most a capped amount. P.L. 119-21, section 71305, struck the caps for tax years beginning after December 31, 2025. The IRS’s premium tax credit Q&A now says there is no repayment cap for tax years after 2025.
Which tax years have no repayment cap?
| Coverage year | Tax return filed | Repayment cap |
|---|---|---|
| 2025 | Early 2026 | Yes, for income under 400% of the poverty line |
| 2026 | Early 2027 | None: full repayment |
| 2027 | Early 2028 | None: full repayment |
The last caps, for tax year 2025, were set by the IRS:
| 2025 household income | Single filer | Any other filer |
|---|---|---|
| Under 200% of the poverty line | $375 | $750 |
| 200% to under 300% | $975 | $1,950 |
| 300% to under 400% | $1,625 | $3,250 |
| 400% or more | No cap | No cap |
How much could a household repay with no cap?
The repayment is the gap between the credit paid on the estimate and the credit earned on actual income. Coverage Decider worked this example from the IRS’s 2027 table (Rev. Proc. 2026-26) and the 2026 poverty guideline of $33,000 for four people. Dollar amounts are rounded to the nearest dollar.
| Family of four, 2027 | Income | Share of income for the benchmark plan | Yearly amount |
|---|---|---|---|
| Estimated at enrollment | $66,000 (200%) | 6.78% | $4,475 |
| Actual on the tax return | $115,500 (350%) | 10.22% | $11,804 |
| Credit repaid | $7,329 |
The example assumes the benchmark silver plan costs more than $11,804 a year for this family, so a credit remains at both incomes. Under the 2025 caps, the same family would have repaid at most $3,250. With no cap, it repays all $7,329.
If that family’s income had gone past $132,000, or 400% of the poverty line, it would get no credit for 2027. It would repay every advance credit dollar received. See the 2027 subsidy cliff for every household size.
How do you keep a repayment small?
- Estimate income carefully. Use expected 2027 modified adjusted gross income for everyone in the tax household who has to file: see what counts as income for the ACA in 2027. The 2027 federal poverty level chart shows where an estimate lands.
- Report changes within 30 days. Federal rules (45 CFR 155.330) require Marketplace enrollees to report changes that affect eligibility within 30 days. A raise, a new job, a marriage or a child leaving the household all count. HealthCare.gov warns that an unreported income increase can mean money owed back.
- Take less in advance. HealthCare.gov lets an enrollee use some, all or none of the credit each month. Credit not taken in advance is claimed on the tax return (IRS Q&A, question 1).
- Recheck midyear. A household with uneven income can rerun its numbers each quarter and update the application.
- Don’t elect COBRA over months with a credit. COBRA is retroactive, and no credit applies to COBRA months, so the advance credit for them is paid back. See COBRA vs. Marketplace in 2027.
What if income ends up lower than the estimate?
Lower income is the easy case. If the final credit is larger than the advance credit, the difference lowers the tax bill or raises the refund (IRS Q&A, question 1).
Income under the poverty line is the exception. Under the IRS rule for 2027 (26 CFR 1.36B-2(b)(6)), income under 100% of the poverty line gets no credit, unless the Marketplace paid an advance credit on an honest estimate between 100% and 400%. Then the credit is figured on actual income. The Medicaid coverage gap explains who falls under the line.
Who should check their numbers before enrolling?
The no-cap rule matters most for households whose income is hard to predict:
- Self-employed people and freelancers, whose profit isn’t known until the year ends.
- Early retirees, whose retirement withdrawals and capital gains count as income.
- Households near 400% of the poverty line, where a small raise ends the credit.
- Families expecting a change, such as a new job, a marriage or a child aging out.
Coverage Decider’s calculator estimates the 2027 credit from household, income and ZIP code, so you can test a few income levels before you enroll. How we calculate lists the 2027 rules it uses. Coverage Decider is not tax advice: for your own return, ask a tax professional or free IRS VITA help. Open enrollment runs Nov. 1, 2026 to Jan. 15, 2027 on HealthCare.gov: see 2027 open enrollment dates.