ACA Subsidies May Trigger A Surprise Tax Bill For Some Americans

Tougher rules for 2026 for anyone who receives an ACA could lead to a bigger tax bill.

If you received an Affordable Care Act Premium in 2025, you may face an unexpected tax bill this filing season.

According to CNN, more than 90% of enrollees received at least some subsidy assistance last year. Subsidies were paid directly to insurers based on projected household income. Enrollees will have to reconcile what they received against their actual earnings by filing Form 8962, using income data the IRS sends on Form 1095-A during tax time.

If the filer’s income exceeded projections, enrollees will have to repay a portion of the subsidies.

For 2025, repayment is capped on a sliding scale, starting at $375 for a single individual earning under $31,300 or two times the federal poverty level. The maximum is $1,625 for individuals and $3,250 for families.

There is no cap for those earning above four times the federal poverty level, totaling $62,600 for an individual in 2025 or $106,600 for a family of three. This means they could owe back all amounts that exceeded their eligibility.

Tougher Rules For ACA Subsidies That Could Impact 2026 Taxes

It’s important to note that repayment caps disappear in 2026 after President Donald Trump signed the One Big Beautiful Bill Act. For taxpayers, this means there will be no sliding-scale limit on how much people could owe back in subsidies for 2026 if their income exceeds their projections.

One problem taxpayers could run into for 2026 is that the average monthly premium for ACA health insurance is around $619. The average subsidy enrollees receive is reportedly around $74, according to the Peterson-KFF Health System Tracker.

Since Congress did not extend subsidies, people are working more to cover healthcare costs. By doing this, many will likely increase their income, which could lead to earning too much in 2026. If workers receive a subsidy in 2026, they could owe it all back next tax season if they earn too much, since there is no cap.