How Repaying ObamaCare’s Premium Tax Credits Works
If your income changes, you may have to pay back Advanced Premium Tax Credit Payments up to the Advanced Tax Credit Repayment Limit based on your income. If you don’t claim enough money to qualify for tax credits, then you won’t owe back anything.
TIP: This page covers Advanced Premium Tax Credit Repayment limits for 2018 plans under the Affordable Care Act (needed for filing for taxes filed April 2019). These numbers have been updated for 2019 tax season. For verification, see the official IRS 8962 form instructions.
What Cost Assistance Must be Paid Back?
You don’t have to pay back Cost Sharing Reduction Subsidies or Medicaid, but you could end up owing Advanced Premium Tax Credits back up to the limit for your income level. If you want to avoid this, make sure to double check your application and report changes to income throughout the year so your credits can be adjusted. For those who are unsure what their income will be, consider taking only part of the Credit upfront.
How Do you Calculate Repayment of Tax Credits?
You’ll calculate your repayment when you file the Premium Tax Credit Form 8962.
What Are the Advanced Tax Credit Repayment Limits?
Line 28. Repayment Limitation. The amount is limited to certain amounts helping to ensure you won’t owe more than you can afford if you received an excess of Advanced Premium Tax Credits. Please note that you’ll owe back all tax credits if you make over 400% and could owe back nothing if you make less than 100% of the poverty level.
TIP: These figures are updated for plans held during 2018. They are subject to slight changes each year. See form 8962 instructions.
TIP: The numbers below are the max amount you will have to repay, not the exact amount. In other words, repayment limits means you can’t pay higher than the amount listed for your family size and % of the Federal Poverty Level. Ex. if you made 201% as a family of two you can’t owe back more than $1,550. Amounts are subject to change each year, so always double check this year’s repayment limits.
NOTE: The following Advanced Tax Credit Repayment limit table from form 8692 is updated for 2018 coverage (accounted for on taxes filed in 2019).
|Income % of FPL||Filing Status:
|Less than 200% FPL||$300||$600|
|At least 200% FPL
but less than 300%
|At least 300% FPL
but less than 400%
|More than 400% FPL||Full Amount Received||Full Amount Received|
|If your year-end income exceeds 400% FPL, you will have to return the total amount of Advanced Premium Tax Credits you received. If you make too little to qualify for subsidies (less 100% FPL), then you should owe NOTHING (per the directions of form 8962 from which this table comes). That being said, if you know you are going to price out of cost assistance, make sure to update your Marketplace account. You might become eligible for a free or low-cost Medicaid plan if your state expanded Medicaid.|
TIP: See federal poverty level for more details. Make sure to refer to the current 8962 form for calculations each year at tax time (you can always use last year’s numbers for a general estimate).