IRS details repayment of excess Obamacare subsidies beginning in 2026
The proposed regulation implements a legal change that eliminates the repayment cap for tax year 2026, although the proposal is not yet final.
The U.S. Internal Revenue Service issued a proposed regulation to update the rules governing Obamacare subsidies. The document is not yet final.
The repayment cap was not eliminated by this proposal. That change was established by the One Big Beautiful Bill Act, signed into law on July 4, 2025, and applies to tax years beginning after December 31 of that year.
During annual tax reconciliation, monthly advance payments of the premium tax credit (APTC) are compared with the final premium tax credit (PTC). If the advance payments exceed the credit for which the taxpayer qualifies, the taxpayer must repay the entire excess; if the person received less assistance, the difference may be claimed.