From 2021 through 2025, households above 400% of the federal poverty line could still get the premium tax credit, the Affordable Care Act's subsidy for marketplace health insurance. The rule that allowed it was written with an end date, taxable years beginning before January 1, 2026, and no extension has been enacted. For 2026 the credit stops at that line again, where it stopped before 2021.
A second change sits on top of that one. Last year's tax law also removed the repayment cap, which limited what you paid back when an advance turned out to be too large. With both in place, 2026 is the first year in the credit's history in which any part of the advance your actual income does not support comes back on your return in full, whatever that income turns out to be.
The credit is paid before it is earned. During the year the Treasury sends it each month to your insurer, sized from the income estimate on your marketplace application. The actual credit is worked out on your return from the year's household income, and section 36B(f)(2) adds any excess advance to your tax. Household income starts from adjusted gross income, the income on your return after above-the-line deductions, and adds back three items the Code names, such as tax-exempt interest.
There is no credit above the line. Section 36B(c)(1)(A) limits the credit to a household whose income "does not exceed 400 percent" of the poverty line, and the provision that switched that phrase off, 36B(c)(1)(E), covers only years "before January 1, 2026." The IRS's 2026 applicable percentage table, the share of income a household is expected to put toward its plan, is in Rev. Proc. 2025-25, and it has no row above 400%. A household that lands above it owes back every dollar advanced during the year. From 2014 through 2019 the rule was the same, so that part is not new.
Below the line is where the law changed. Through 2025, a household under 400% that had been over-advanced repaid at most a fixed amount, set in a small table in the Code and indexed each year. That table was the repayment cap, and section 71305 of the 2025 tax law struck it for years beginning after December 31, 2025. A household that estimated 250% of the poverty line and finished at 350% now repays the whole difference between what was advanced and what its actual income supports. Treasury's regulation, section 1.36B-4(a)(3), still prints the repayment cap. The statute controls, and the cap no longer applies.
An estimate made at open enrollment is a guess for anyone whose income depends on sales. A contract that closes in November or a spouse who starts a new job can move household income across the line after most of the year's advance has been paid.
Two things still move the 2026 result. The advance can be re-determined when income changes substantially, so the application is worth updating when it does. And because household income starts from adjusted gross income, a self-employed owner's deductible contribution to their own retirement plan, taken above the line under section 62(a)(6), lowers the figure the credit is tested against. Florida has no income tax, so this is a federal question only.
For 2026, the marketplace credit is settled on the return against the income the household actually had.
Sources: IRC 36B(c)(1)(A), (c)(1)(E), (d)(2), (f)(1)-(2), as amended by Pub. L. 119-21 sec. 71305 (taxable years beginning after Dec. 31, 2025) - https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section36B&num=0&edition=prelim · IRC 36B(f)(2)(B) before amendment (the repayment cap, households under 400%), U.S. Code 2023 edition - https://www.govinfo.gov/content/pkg/USCODE-2023-title26/html/USCODE-2023-title26-subtitleA-chap1-subchapA-partIV-subpartC-sec36B.htm · Rev. Proc. 2025-25, sec. 3.01 (2026 applicable percentage table) - https://www.irs.gov/pub/irs-drop/rp-25-25.pdf · 26 CFR 1.36B-4(a)(3) (not yet conformed) - https://www.law.cornell.edu/cfr/text/26/1.36B-4 · 42 U.S.C. 18082(b)(2), (c)(2)(A) (advance payments to the insurer; re-determination on changed income) - https://www.law.cornell.edu/uscode/text/42/18082 · IRC 62(a)(6) - https://www.law.cornell.edu/uscode/text/26/62