If you qualify for a tax credit and then get a new job that increases your income, and cancel the exchange insurance switching to the insurance provided by your new employer do you still have to repay the tax credit? Since you are no longer taking advantage of the reduced rate insurance from the exchange as soon as your income increases I do not understand why you would be required to payback up to the full limit of the tax credit when doing taxes?


Tax credits are based on annual income, not monthly income. This doesn't do much to help people between jobs when income is low, but it's important to understand to avoid repayments of tax credits. Repayment limits are based on annual household income too.

If people are willing to pay back the tax credit, they can use advanced tax credits as a loan of sorts to ensure they can afford coverage. The benefit to this is that if their income ends up being low enough to qualify them for tax credits they won't have to repay (or at least not the full amount) at the end of the year.

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