Premium tax credit · Taxes · Michigan
Paying back the premium tax credit: the cap is gone for 2026
If your income ends up higher than you estimated, you may owe some of your Marketplace tax credit back. Through 2025 that payback had a limit for most people. Starting with 2026 coverage, it doesn’t.
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- No cap after 2025
- Form 8962 at tax time
- Update income during the year
Check my income estimate
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How the advance credit works
When you apply, the Marketplace estimates your credit from your household, your expected income and whether anyone can get other coverage. You choose to have all, some or none of it paid in advance to your insurer.[3] Each month’s credit is generally the price of the second-lowest-cost Silver plan where you live, minus the share of income you’re expected to pay, or your actual premium if that is lower.[4]
For 2026 coverage, the expected share runs from 2.10% of income below 133% of poverty to 9.96% from 300% to 400% of poverty, and the 2026 table stops at 400%.[5] Your savings are based on your expected income for the coverage year, so if you don’t update it you could get too little help, or too much and pay it back.[6]
The old caps vs. now
| Household income (% of poverty) | 2025 cap, single filer | 2025 cap, other filers | 2026 and later |
|---|---|---|---|
| Less than 200% | $375 | $750 | No cap |
| 200% to under 300% | $975 | $1,950 | No cap |
| 300% to under 400% | $1,625 | $3,250 | No cap |
| 400% or more | No cap | No cap | No cap |
2025 caps: IRS Form 8962 instructions, Table 5.[4] 2026 and later: IRS FS-2025-10, Q31.[1]
Illustration (arithmetic only): say a single filer at 250% of poverty took $3,000 more in advance credit than they qualified for. Under the 2025 table they would repay at most $975. For 2026 they repay the full $3,000.[4,1]
What happens at tax time
- Get Form 1095-A. It should arrive by mid-February and may be in your Marketplace account from mid-January.[7]
- Complete Form 8962. If advance credit was paid for anyone in your family, you must file it to reconcile.[1]
- Any excess is added to your tax. It goes from Form 8962, line 29, to Schedule 2 (Form 1040), line 1a, which lowers your refund or raises what you owe.[4,1] If you got less in advance than you qualify for, the difference is added to your refund.[1]
- Can’t pay it all? The IRS offers the same payment arrangements it offers for other tax balances.[1]
How to lower the risk
- Report changes during the year. If your income or household changes, update your application as soon as possible. Higher income or losing a household member can mean you qualify for less savings than you’re getting.[8] See what counts as income.
- Take less in advance. You can choose to receive only some, or none, of your credit in advance.[3] If you qualify for more than you got in advance, the difference is added to your refund.[1]
- Check your 2027 estimate at renewal. See auto re-enrollment for 2027 and what changed when the enhanced subsidies ended.
This page is general information, not tax advice. For your own return, talk with a tax professional.
Sources
- IRS Fact Sheet FS-2025-10, Questions and Answers about the Premium Tax Credit (updated Dec. 23, 2025), Q1 and Q29–Q32. https://www.irs.gov/pub/taxpros/fs-2025-10.pdf
- IRS, Working Families Tax Cuts provisions page (Premium Tax Credit; Health Savings Account expansion). https://www.irs.gov/newsroom/working-families-tax-cuts
- IRS, Premium Tax Credit: claiming the credit and reconciling advance credit payments. https://www.irs.gov/affordable-care-act/individuals-and-families/premium-tax-credit-claiming-the-credit-and-reconciling-advance-credit-payments
- IRS, Instructions for Form 8962 (2025): monthly credit amount, applicable SLCSP premium, Table 5 Repayment Limitation, line 29. https://www.irs.gov/pub/irs-pdf/i8962.pdf
- IRS Rev. Proc. 2025-25, Applicable Percentage Table for 2026. https://www.irs.gov/pub/irs-drop/rp-25-25.pdf
- HealthCare.gov, Renew, change, update, or cancel your plan. https://www.healthcare.gov/keep-or-change-plan/
- HealthCare.gov, Using your Form 1095-A (taxes). https://www.healthcare.gov/taxes/
- HealthCare.gov, Reporting income, household, and other changes. https://www.healthcare.gov/reporting-changes/
Checked October 16, 2026. 2027 Marketplace plans and final 2027 rates aren’t published yet; we’ll update this page when they are.
Frequently asked questions
Is there a limit on paying back the premium tax credit for 2026?
No. For tax years after 2025 there is no repayment cap. You repay the full amount by which your advance credit payments exceed the credit you qualify for.
Get my options or call 616-808-9426.
What were the repayment caps for 2025?
For a single filer: $375 under 200% of poverty, $975 from 200% to under 300%, and $1,625 from 300% to under 400%. Other filers had double those amounts. No cap applied at 400% or more.
Get my options or call 616-808-9426.
How can I avoid owing money back?
Keep your income estimate current with the Marketplace during the year, and consider taking only part of your credit in advance.
Get my options or call 616-808-9426.
Will you sell my information?
No. We do not sell your information. Nexus uses it to answer your request and shares it only as our Privacy Policy explains, for example with your insurance carrier when you enroll, or with service providers that help us run our website.
Get my options or call 616-808-9426.