The repayment cap on Obamacare subsidies is gone for 2026

Updated November 2026

When you enroll in Marketplace coverage, the subsidy is based on the income you expect to earn. At tax time, Form 8962 compares that estimate with your actual income. If you earned more, you received too much subsidy and must repay the difference.

What changed

Until now, households under 400% of the poverty line had a cap on that repayment (at most $3,250 for 2025, depending on income and filing status). Public Law 119-21, section 71305, removed the cap starting with tax year 2026, so 2026 returns filed in 2027 repay the full excess.

The expanded credits of 2021–2025 have also ended. If your 2026 income is above 400% of the poverty line, you qualify for no credit, and generally everything paid to your insurer during the year becomes a tax bill.

Who is most affected

• Freelancers, gig workers, and small-business owners whose income was higher than expected
• People who started a job or received a raise or bonus mid-year
• Early retirees who sold investments or took retirement-account withdrawals

Can you still reduce it?

Often, yes. Deductible contributions to a traditional IRA or HSA made by April 15, 2027 count for 2026, and self-employed people can fund a SEP-IRA up to their filing deadline. Each deductible dollar lowers the income used for the credit. See how to lower your income for the premium tax credit.

Related guides

This guide is general information, not tax advice. Clawback Check is not affiliated with HealthCare.gov, any state Marketplace, or the IRS.