This is the step that catches people who have no other reason to file. The credit you received each month was an advance payment based on the income you estimated. The return is where the advance is compared against what your income actually turned out to be, and the difference is settled in one direction or the other.
| If your actual income was | Then |
|---|---|
| Lower than you estimated | You may get the extra credit back as a refund |
| Higher than you estimated | You repay some or all of the excess advance payments |
| About what you estimated | Little or no change |
| Never reported, because you did not file | Refunds are delayed and future advance payments may be affected |
How it works
In January the Marketplace sends Form 1095-A, which lists the plan you had, every month you had it, and the advance credit paid to the insurer on your behalf. The IRS says to use the information on Form 1095-A to claim the credit or reconcile advance credit payments on Form 8962. That form produces one number: either an additional credit you are owed, or an amount of the advance you have to pay back.
What it costs to skip
Not filing does not make the obligation go away. The IRS states that failing to file and reconcile will delay your refund and may affect your eligibility for future advance credit payments, which means the Marketplace can stop paying the credit toward your premiums, which turns a manageable plan into a full-price one. This is the single most common way a household that qualified for help ends up without it the following year.
What to do next
Watch for Form 1095-A and do not discard it. If your income changed during the year, whether a better quarter, a new contract or a job that ended, report it to the Marketplace when it happens rather than waiting for the return, because updating the estimate mid-year shrinks the surprise at filing time. If you are self-employed, the return and the coverage are really one conversation.
Read the full guide: The subsidy cliff, explained
Related questions
What if I do not normally file a return?
You still have to file for any year you received a premium tax credit. The IRS says you must file even if you are usually not required to.
What is Form 1095-A?
The statement the Marketplace sends in January showing your plan, the months you were covered, and the advance credit paid on your behalf. You need it to complete Form 8962.
What happens if my income went up?
You repay some or all of the excess advance payments on your return. Reporting the change to the Marketplace during the year reduces how much that is.
Sources
- The Premium Tax Credit — The basics — Internal Revenue Service · read 2026-10-13
This page explains published rules and figures, with the source for each one. It is not advice about your own situation.