Tax time can come with big surprises for some people who have Affordable Care Act coverage, including owing money back to the government for premium subsidies received during the previous year.
More changes lie ahead that make it important for those getting subsidies in 2026 to track their income and take steps to protect against that kind of financial hit.
First, the basics of how the subsidies work.
Enrollees pay a percentage of their household income toward their health insurance premiums based on a sliding scale, ranging in 2025 from nothing for very low-income people to 8.5% at higher income levels. Subsidies, usually paid directly to insurers, cover the rest.
The income calculation done during open enrollment is an estimate of what a household thinks it will earn in the coming year. At tax time, ACA enrollees must reconcile what they received in subsidies with what they actually earned. If their income rose, they might owe some of the subsidies back.
But don’t skip filing! People who get ACA subsidies must file tax returns no matter their income, and that is becoming even more important: The Trump administration is already removing people from subsidy eligibility if they have gone two consecutive years without filing, and it is proposing lowering that to one year.
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Beware Surprise Tax Bills
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