Can I Keep ACA Credits if My Income Goes Up?

If you’re unemployed, the Affordable Care Act (ACA) can provide you with financial assistance to help you afford health insurance. This assistance comes in the form of premium tax credits, which reduce the monthly cost of your health insurance premiums.

However, if your income increases during the year, you may have to repay some of your premium tax credits when you file your taxes. This is because the amount of premium tax credits you receive is based on your estimated annual income. If your actual income ends up being higher than your estimated income, you may have to pay back some of the credits you received.

The good news is that there are limits on how much you have to repay. For 2023, you will not have to repay any of your premium tax credits if your income is below 400% of the federal poverty level (FPL). If your income is between 400% and 600% of the FPL, you will have to repay a portion of your credits. The amount you have to repay will depend on your income and the number of months you received premium tax credits.

If you are concerned about having to repay your premium tax credits, you can take steps to reduce your risk. One option is to estimate your income conservatively when you apply for health insurance. Another option is to make estimated tax payments during the year. This will help to ensure that you do not owe too much in taxes when you file your return.

If you do have to repay some of your premium tax credits, you will do so when you file your taxes. You will need to complete Form 8962, Premium Tax Credit. This form will calculate the amount of credits you have to repay.

Here are some additional things to keep in mind about premium tax credits:

You can only receive premium tax credits if you have health insurance through the Health Insurance Marketplace.
The amount of premium tax credits you receive is based on your income, family size, and the cost of your health insurance plan.
You can receive premium tax credits in advance each month to help you pay for your health insurance premiums.
If you receive premium tax credits in advance, you may have to repay some of the credits when you file your taxes.
The limits on how much you have to repay premium tax credits are different for 2023 than they were for previous years.