Reconciliation is the process of comparing the premium tax credit you actually received during the year with the amount you were entitled to based on your actual income. You do this when you file your federal tax return, using Form 8962 and information from your Form 1095-A.
When you enroll in a Marketplace plan, you estimate your annual income. Based on that estimate, you may receive an Advance Premium Tax Credit (APTC), a monthly discount applied directly to your premiums. But if your actual income for the year turns out to be different from your estimate, the credit amount needs to be adjusted.
If you earned less than estimated, you may get a larger credit, which means a bigger tax refund. If you earned more than estimated, you may owe some or all of the advance credit back when you file taxes. For the 2026 tax year, there are no caps on APTC repayment, meaning you could owe back the full excess credit amount.
This is a big deal for families whose income fluctuates. If you get a raise, pick up extra hours, or have a spouse start working mid-year, your actual income may push you above the subsidy threshold. With the enhanced subsidies expired as of December 31, 2025, the subsidy cliff is back at 400% FPL; earning even slightly above that means you may owe back your full advance credit.
Report income changes to the Marketplace as soon as they happen. This adjusts your monthly APTC in real time and helps avoid a painful surprise at tax time. If you need help with reconciliation, call us at (305) 330-1277.
If you received APTC and don't file Form 8962, the IRS may delay your refund or send you a notice. You're required to reconcile if you received any advance premium tax credit during the year.
No. For the 2026 tax year, repayment caps have been removed. If your actual income was higher than your estimate, you could owe back the full excess amount. This makes it critical to report income changes to the Marketplace promptly.
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