INDIVIDUAL TAX · 4 MIN READ
What Does the Health Insurance Marketplace Have to Do With My Taxes?
By Hevia & Hevia CPA Firm · Published
Reviewed by Alexander Hevia, CPA, J.D., LL.M. (Taxation) —
If you purchase health insurance through the Health Insurance Marketplace, your monthly premium may be reduced by a federal tax credit. That assistance is connected to your tax return—and changes in your income or household can affect how much you ultimately qualify to receive.
Understanding that connection can help you avoid an unexpected tax bill.
Why does my CPA need Form 1095-A?
The Marketplace provides Form 1095-A, Health Insurance Marketplace Statement, showing your coverage, premiums, and advance premium tax credit payments.
Your CPA uses this information to complete Form 8962, which compares the advance credit paid to your insurance company with the credit you actually qualify for. This comparison is called reconciliation. If your Form 1095-A is missing or incorrect, contact the Marketplace before completing your return. HealthCare.gov: Reconciling your premium tax credit
Why would I have to repay a health insurance credit?
Advance premium tax credits are based on estimates. Your final eligibility depends on your actual household income, family circumstances, and other applicable requirements.
If your allowable credit is smaller than the amount paid in advance, the excess generally increases your tax liability. If your allowable credit is larger, the additional credit can reduce your balance due or increase your refund. IRS: Premium Tax Credit questions and answers
For example, suppose your insurance company received $9,000 in advance credits, but your final allowable credit is $6,000. The difference is $3,000 in excess advance credits.
The repayment rules depend on the year of coverage.
What changes for 2026, 2027, and beyond?
The removal of repayment caps begins with the 2026 tax year, generally reported on the return filed in 2027. It does not begin with 2027 coverage.
| Coverage and tax year | Return generally filed in | Treatment of excess advance credits |
|---|---|---|
| 2025 | 2026 | Income-based repayment caps may apply to eligible households below 400% of the federal poverty level. |
| 2026 | 2027 | Repayment caps no longer apply; the full excess must be repaid. |
| 2027 and later | 2028 and later | Under current law, full repayment of excess advance credits continues. |
The calendar year in which you file does not determine the rule: a 2025 return filed during 2026 follows the 2025 rules. IRS: Repayment caps eliminated beginning in tax year 2026
In the example above, the full $3,000 excess would be repayable for 2026 coverage. That does not necessarily mean repaying every dollar of assistance—only the amount exceeding your final allowable credit.
Separately, beginning in 2026, the temporary expansion allowing credits above 400% of the federal poverty level has ended. Exceeding that threshold can eliminate your credit and require repayment of all advance credits. Other eligibility requirements also apply. IRS: Premium Tax Credit overview
How can I reduce the risk of a surprise?
Update your Marketplace application promptly when your income, household, or access to other coverage changes. A new job, increased business profits, or a change in dependents may affect your assistance. HealthCare.gov: Reporting changes
If your income fluctuates, ask whether taking less of the credit in advance would be appropriate. Review your income estimate with your CPA during the year rather than waiting until filing season.
Hevia & Hevia CPA Firm helps individuals, business owners, and families understand how health coverage and tax planning fit together.
Contact our team before an income change becomes an unexpected tax liability.
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