Premium Tax Credit Repayment: What It Means for Your 2027 Coverage
What happens if I have to repay my premium tax credit?
If you got an ACA premium tax credit in 2026 and your income came in higher than you estimated, you may have to pay some or all of it back when you file your 2026 taxes. Starting with 2026 returns, filed in 2027, the limit that used to cap that repayment for many households was removed, so a good year can mean a bigger tax bill than people expect. How much you owe is a question for your CPA. What I help with is the next step: making sure your 2027 coverage doesn't set you up for the same surprise. Ryan Michalek at Michalek Health Solutions, an independent broker in Tampa, Florida (licensed in 31 states), compares your options at no cost.
If your tax preparer just told you that you owe back part of your health insurance subsidy, you're not alone, and you didn't necessarily do anything wrong. Self-employed income is hard to predict, and the subsidy is based on a guess you made a year in advance. This guide won't do your taxes. It will help you understand why this happened and what it means for the coverage you choose next.
Why you might owe it back
The premium tax credit is usually paid in advance, month by month, based on the income you estimated when you enrolled. When you file your return, that estimate gets compared with what you actually earned, on IRS Form 8962. If you earned more than you estimated, you may have received more help than you qualified for, and the difference comes back to you as a balance due.
For 2026 coverage this matters more than usual. The enhanced subsidies expired at the end of 2025, so the 400% subsidy cliff is back. If your income ended the year above that line, you may not have qualified for any credit at all.
What changed for 2026 returns
Until now, many households below 400% of the federal poverty level had a cap on how much excess credit they could be asked to repay. A federal law passed in 2025 removed that cap for tax years beginning after December 31, 2025. That makes 2026 returns, the ones filed in early 2027, the first where the repayment isn't limited. Households above 400% never had a cap.
I won't put numbers on it here, because the amount depends on your income, your household, and how you file, and that's your CPA's job, not mine. What's worth knowing is that the exposure is real, and it lands hardest on people whose income moves around.
Who it hits hardest
Self-employed people, 1099 contractors, and small business owners. You estimate your income a year ahead, and it rarely cooperates. A strong quarter, a big contract, or selling a piece of equipment can push you past your estimate, or past the cliff, and you may not find out until tax time.
What this means for your 2027 coverage
You have two honest paths, and the right one depends on your numbers:
- Stay on the marketplace, with a more careful estimate. If you expect to qualify for help, work with your CPA on a realistic projection and update it when your income changes during the year, so the advance credit tracks what you actually earn. See how ACA subsidies work for the self-employed →
- Look at private coverage if you'll be over the line. If you expect to earn above the cliff, a subsidy may not be part of your picture anyway. Private under-65 plans don't use the premium tax credit, so there's no subsidy to reconcile at tax time. They work differently from marketplace plans and consider health history, so approval isn't guaranteed and it's worth comparing carefully. See private vs. the ACA marketplace →
A note on timing: Open Enrollment for 2027 runs November 1, 2026 through January 15, 2027, but many repayment surprises show up in February through April, after the window closes. Private under-65 plans can often be applied for year-round, so you may not have to wait until next fall to make a change. If you're not sure what's open to you right now, see can I enroll now? →
What I do, and what your CPA does
I'm a licensed health insurance broker, not a CPA or tax advisor. Your CPA works out what you owe and how to plan your income. I help you choose coverage that fits the income picture they give you, so next year's return doesn't hold the same surprise. If your CPA wants to talk it through with me, I'm glad to. No fee, no pressure, and I'm still here long after you're covered.
Sources: IRS — One Big Beautiful Bill provisions · IRS — the Premium Tax Credit · HealthCare.gov — taxes and your coverage. Educational and general; not tax, legal, or financial advice. Confirm your specific situation with your CPA. Current as of October 2026.
Related guides: The ACA subsidy cliff → · How ACA subsidies work → · The self-employed health insurance deduction → · Private vs. the ACA marketplace → · Self-employed coverage →
Not sure what this means for your 2027 plan? Michalek Health Solutions, an independent Tampa broker, can run your real numbers and your real options together.
Premium tax credit repayment, answered straight.
Do I have to pay back my premium tax credit?
You may, if your actual income for the year was higher than the estimate your advance credit was based on. The difference is reconciled on your tax return using IRS Form 8962. Whether you owe, and how much, depends on your income, household, and filing status, so your CPA or tax preparer is the right person to calculate it.
What is Form 1095-A, and do I need it?
Form 1095-A, the Health Insurance Marketplace Statement, comes from the marketplace, not the IRS, if anyone in your household had a marketplace plan during the year (catastrophic plans excepted). It's what you or your tax preparer use to complete Form 8962, where your premium tax credit is reconciled. It typically appears in your marketplace account by mid-January and arrives by mail by mid-February, and state-run exchanges send their own. HealthCare.gov advises waiting for an accurate 1095-A before you file. What it means for your return is a question for your CPA.
Is there a limit on premium tax credit repayment for 2026?
Not anymore. A federal law passed in 2025 removed the repayment limits for tax years beginning after December 31, 2025. That makes 2026 returns, filed in 2027, the first where excess credit isn't capped for households that used to qualify for a limit. Your CPA can tell you what that means for your return.
Why do I owe money back for my marketplace subsidy?
The subsidy is usually paid in advance based on the income you projected. If you earned more than you projected, or crossed the 400% subsidy cliff, you may have received more help than you qualified for, and that excess comes back as part of your tax bill.
How can I avoid owing the subsidy back next year?
Two things help: a realistic income estimate and the right kind of coverage. If you stay on the marketplace, work with your CPA on your projection and update it when your income changes. If you expect to earn above the subsidy line, private under-65 plans don't use the premium tax credit, so there's no subsidy to reconcile at tax time.
Can I switch health plans after Open Enrollment ends?
For marketplace plans, usually only with a qualifying life event. Private under-65 plans can often be applied for year-round, so if a repayment bill shows you're over the line, you may not have to wait until next fall. Approval isn't guaranteed, because private plans consider health history.
Can you help me figure out what I owe?
No, that's a tax question, and I'm an insurance broker, not a CPA. Your tax professional calculates the repayment. I help with the coverage side: choosing a plan for 2027 that fits your real income so the same surprise doesn't repeat.
Does it cost anything to work with you?
No. There's no fee to work with me. I'm compensated by the carriers, not by you, so you get a licensed advisor who compares your options at no cost.
Find your starting point.
ACA subsidies, self-employed
Whether income-based savings could lower your net premium.
Do you qualify? →Self-employed & 1099
Coverage built for freelancers, contractors, and solo business owners.
Explore self-employed →The ACA subsidy cliff
Earn past the line and premium help stops all at once.
See the cliff guide →Compare plan types
PPO vs. HMO vs. EPO vs. POS — a plain-English breakdown of how plans differ.
See the comparison →Not sure where your income lands for 2027? You don't have to guess. Your CPA reads the income side, I compare the coverage either way, and I'm glad to coordinate with them. One honest starting point, whatever fits your family. Meet the partners I trust →
In their words
“Ryan was so helpful and kind! He responded quickly and throughly explained my options. Ryan made finding health insurance such a breeze!”
— Alecia C.
“Ryan Michalek was great, very patient and thorough in what I needed for health vision and dental coverage. I recommend everyone that needs help to reach out to him.”
— Mario P.
“We reached out to many places looking for insurance. Ryan was the most knowledgeable person we spoke to. He showed us all our options and made sure we understood every step before we moved on! Thank you Ryan 10/10 recommend”
— Fidel G.
CPAs & financial advisors: this is exactly the kind of coverage question your clients bring you. Send it my way — no fee to them, no conflict with you.
How referral partnerships work →Owe it back this year? Let's make 2027 different.
Your CPA handles the return. I'll help you pick coverage that fits your real income, marketplace or private, so next year's filing doesn't come with the same surprise.
Not ready to talk yet? You can run the free estimator → to see where you'd land, or book a 15-minute call → whenever it suits you.