Tax Season and Your 1095-A: What to Do If Your Subsidy Was Wrong

What is Form 1095-A?

Form 1095-A is a tax document sent by your health insurance marketplace (HealthCare.gov or your state exchange). It reports three things for each month you were enrolled: the premium for the plan you selected, the premium for the second-lowest-cost Silver plan (the benchmark), and the amount of advance premium tax credit (APTC) that was paid on your behalf to your insurer.

The marketplace is required to send you this form by January 31 of the following year. For 2025 coverage, you should have received your 1095-A by January 31, 2026. You can also download it from your HealthCare.gov account under "Tax Forms."

You need this form to file your taxes. If you received any APTC during the year, you are required to file Form 8962 with your federal return. There is no way around this.

What Form 8962 does

Form 8962 is where the reconciliation happens. You are comparing two numbers: the advance credit you already received (what the government paid your insurer each month) and the actual credit you qualify for based on your real income for the year.

When you enrolled, you estimated your annual income. The marketplace used that estimate to calculate your monthly subsidy. But your actual income for the year may have turned out higher or lower than the estimate.

• If you earned more than you estimated, your actual credit is smaller than what you received in advance. You owe the difference.
• If you earned less than you estimated, your actual credit is larger. You get the difference back as a tax refund.

Form 8962 walks through this math line by line. You enter your household income, family size, and the data from your 1095-A. The form calculates your actual premium tax credit and tells you whether you owe or are owed money.

What happens if you owe money back

This is where things changed significantly.

For 2025 coverage (filed in early 2026): Repayment caps still apply. If your income was below 400% of the federal poverty level, the most you can owe back is limited. For a single filer below 200% FPL, the cap is $375. Between 200-300% FPL, it is $975. Between 300-400% FPL, it is $1,625. For married filing jointly, those caps double. If your income exceeded 400% FPL, there is no cap, and you repay the full excess.

For 2026 coverage (filed in early 2027): The repayment caps are gone. The One Big Beautiful Bill Act eliminated excess APTC repayment caps starting with the 2026 plan year. If you received more subsidy than you qualified for in 2026, you owe back every dollar of the excess regardless of your income level. This is a major change that makes accurate income reporting far more important going forward.

What happens if you're owed more

If your actual income was lower than what you estimated, or if your family size increased, you may qualify for a larger credit than what you received. In that case, Form 8962 will calculate an additional premium tax credit that gets added to your refund (or reduces what you owe).

This is common for people with variable income: freelancers, gig workers, people who switched jobs, or anyone whose year ended up different than they expected. It is worth filing even if you think nothing changed, because the benchmark plan premium (the second-lowest Silver plan) may have been different from what you assumed.

The 400% FPL cliff and your tax return

If your income crosses 400% of the federal poverty level, the subsidy cliff applies. You lose eligibility for the premium tax credit entirely and must repay all of the APTC you received during the year.

For 2025, the cliff thresholds are roughly $62,160 for a single person and $127,400 for a family of four. For 2026, the numbers are slightly higher due to FPL adjustments.

If you received $6,000 in advance credits and your income comes in at 401% FPL, you owe back the entire $6,000. This can turn what you expected to be a refund into a substantial tax bill. For 2025, repayment caps limit the damage at income levels below 400% FPL. For 2026 and beyond, there are no caps at any income level.

Common errors on Form 1095-A

The 1095-A is generated by the marketplace, not by you, but that does not mean it is always correct. Common errors include:

• Wrong months of coverage. If you started or ended coverage mid-year, the form should only show premiums for the months you were actually enrolled. Sometimes it shows a full twelve months when it should not.
• Wrong premium amounts. The premium listed should match your plan's actual monthly cost. If you changed plans mid-year, each period should reflect the correct plan's premium.
• Wrong APTC amounts. If you updated your income mid-year and your subsidy changed, the form should reflect the different amounts for different months.
• Coverage for the wrong people. If household members were added or removed, the form may not reflect those changes correctly.

How to fix a 1095-A error

If you spot an error, contact the marketplace directly. For HealthCare.gov, call 1-800-318-2596. For state exchanges, contact your state marketplace. The marketplace will research the issue, and if a correction is needed, they will issue a corrected 1095-A with the "CORRECTED" box checked.

If you have not filed your tax return yet, wait for the corrected form and use it when you file. If you already filed, you may need to submit an amended return (Form 1040-X). However, the IRS has a special relief provision: if you filed using the original 1095-A in good faith and the marketplace later corrects it, the IRS generally will not pursue additional taxes based on the corrected information. This relief does not apply if you knew the original form was wrong when you filed.

Self-employed health insurance deduction

If you are self-employed, there is an interaction between the premium tax credit and the self-employed health insurance deduction that trips people up.

Self-employed individuals can deduct health insurance premiums on line 17 of Schedule 1. But you can only deduct the portion of the premium you actually paid, not the part covered by your subsidy. And the deduction reduces your adjusted gross income, which in turn affects your subsidy calculation. This creates a circular dependency.

The IRS provides an iterative calculation method in the Form 8962 instructions (and Publication 974) to resolve this. You effectively run the math multiple times until the numbers converge. Most tax software handles this automatically, but if you are filing by hand or using a basic tool, you may need to work through it.

The key point: do not claim the deduction for the full premium if part of it was covered by a tax credit. That will reduce your AGI too much, inflate your subsidy at tax time, and create errors on your return.

What to do right now

• Check if you received your 1095-A for 2025 coverage. If not, download it from your HealthCare.gov account or contact your marketplace.
• Review the form for accuracy before filing. Compare the months, premiums, and APTC amounts against your own records.
• File Form 8962 with your return. If you skip it and you received APTC, the IRS will follow up and your refund will be delayed.
• If you are still enrolled for 2026, update your income on HealthCare.gov now if it has changed. With no repayment caps for 2026, getting your subsidy right during the year is more important than ever.

Estimate your current subsidy

If you want to see what your premium tax credit should be for 2026 based on the current rules, use the calculator below.