Excess advance premium tax credit repayment, 2026.

What changed for 2026

Advance payments of the premium tax credit are reconciled on your return. If they exceed the credit you are allowed, 26 U.S.C. 36B(f)(2) says the tax for the year "shall be increased by the amount of such excess." Before 2026 the Code also limited that increase for households under 400% of poverty. Public Law 119-21 (July 4, 2025), section 71305, struck that limitation, and the amendment applies to taxable years beginning after December 31, 2025. So on your 2026 return, you repay the whole excess.

The caps that used to apply

The 2025 Instructions for Form 8962, Table 5, limited repayment by percent of poverty:

Those amounts are for tax year 2025 and are shown here only so you can see what the change costs. They do not apply to 2026.

How the calculator works

1. Credit you qualify for = benchmark premium minus your expected contribution at your actual income, using the 2026 applicable percentage table (Rev. Proc. 2025-25) and the 2025 poverty guidelines. It is zero below 100% or above 400% of poverty.
2. Excess = advance credit received minus that credit, never below zero.
3. If the credit you qualify for is larger, the difference is a net credit that reduces tax or raises your refund.

Worked example

Two people, 48 states, actual 2026 income $80,000, benchmark $14,400 for the year, advance credit received $13,000. The poverty line is $21,150, so income is 378.3% of it and the expected rate is 9.96%: a contribution of $7,968. The credit you qualify for is $6,432. The excess is $6,568, all of it due on the return. Under the 2025 rules a married-couple cap of $3,250 would have limited the repayment to $3,250. If the same household ended the year at $90,000, income would exceed 400%, the allowed credit would be zero and the full $13,000 would come back, as it would have under the old rules too.

How to avoid a large repayment

• Report income changes to the Marketplace when they happen so advance payments are adjusted.
• Estimate conservatively near 400% of poverty: one more dollar of income can remove the whole credit. See the cliff calculator and the 2027 limits.
• Pre-tax retirement and HSA contributions lower MAGI.

What this does not cover

• Months with unpaid premiums, shared policies after a divorce, the alternative calculation for the year of marriage and other special rules in the Form 8962 instructions.
• Individuals not lawfully present, who had a separate treatment under the instructions.
• The Form 8962 line numbers for 2026, which the IRS has not yet published; the lines cited on the helper page come from the 2025 instructions.

Sources

Retrieved 2026-11-01. Each page was opened and read against the claim next to it.

• 26 U.S.C. 36B, premium tax credit (Cornell LII): the full-excess rule in (f)(2), the 400% limit, and the note that the section 71305 amendment applies after December 31, 2025.
• IRS, Instructions for Form 8962 (2025): Table 5 repayment limitation for 2025 and the Part II and Part III line instructions.
• IRS Rev. Proc. 2025-25, 2026 applicable percentage table: the 2026 applicable percentage table.
• Federal Register, 2025 HHS poverty guidelines: the 2025 poverty guidelines used for 2026 coverage.