The formulas
- Allowed credit = 0 if household income is above 400% of the poverty line (2026)
- Excess = advance credit - allowed credit; repaid in full
- Net credit = allowed credit - advance credit, if positive
How it works
The One Big Beautiful Bill Act removed Section 36B(f)(2)(B), the table that capped repayment of excess advance credit, for tax years beginning after December 31, 2025. Rev. Proc. 2025-32 section 2.04 drops the inflation adjustment for that table, and Publication 505 for 2026 states there is no longer a limit on what you pay back, even below 400% of the poverty line.
Publication 505 also states that for 2026 a household with income above 400% of the poverty line is not eligible for the credit at all. Every dollar of advance credit paid on its behalf is repaid. Report income changes to the Marketplace during the year to keep advance payments close to the final credit.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
Is there any cap on repayment for 2026?
No. The cap table was repealed for tax years after 2025, so the entire excess is added to tax.
Where does the allowed credit come from?
Form 8962 computes it from the benchmark plan premium, household income and the applicable percentage. Enter that figure here.
What if I received less in advance than I qualify for?
The difference is a refundable net premium tax credit on your return.
Sources
- IRS Rev. Proc. 2025-32, 2026 inflation-adjusted items (IRB 2025-45)
- IRS Publication 505 (2026), Tax Withholding and Estimated Tax
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