Tax season can bring unexpected costs for people with Affordable Care Act

Tax season can bring unexpected costs for people with Affordable Care Act coverage because premium subsidies are based on estimated income. Enrollees pay a portion of their income toward premiums on a sliding scale, while subsidies cover the rest, but those estimates are reconciled at tax time using actual earnings. If income ends up higher than expected, individuals may have to repay some of the subsidies. With additional changes coming in 2026, it’s increasingly important for recipients to closely track their income and adjust their estimates to avoid financial surprises. Howard Gleckman, Senior Fellow at the Tax Policy Center, joins Newell to explain further.