How Changes in Income Can Affect Your Health Insurance and Your Tax Bill

Got a raise? Changed jobs? Started a side business? Took money out of a retirement account?

Congratulations may be in order, but if you have health insurance through the Marketplace, there may be one more item to add to your to-do list:

Update your Marketplace application.

Your income doesn't just affect your paycheck and your taxes. It can also affect how much financial assistance you receive toward your health insurance premiums.

And beginning in 2026, failing to keep that information current could potentially result in a much bigger surprise at tax time.

Why 2026 Makes Reporting Income Changes Even More Important

Many people with Marketplace coverage receive an Advance Premium Tax Credit (APTC) that lowers the amount they pay toward their health insurance premium each month. 

But there's something important to understand:

That monthly assistance is based on an estimate.

When you apply for coverage, your eligibility for a premium tax credit is based in part on the household income you expect to receive during the coverage year.

Then, when you file your federal tax return, the amount of assistance paid toward your coverage is reconciled with the amount you qualified to receive based on your final household income and family size.

Here's the important change for 2026:

For tax years after 2025, federal law removed the repayment caps that previously limited how much excess Advance Premium Tax Credit certain households might have to repay.

Beginning with the 2026 tax year, if you receive more Advance Premium Tax Credit than you ultimately qualify for, you generally must repay the full excess amount.

That makes keeping your Marketplace income estimate accurate more important than ever.

A Raise Can Be Great News, But Don't Forget Your Health Insurance

Imagine this scenario:

Sarah enrolls in Marketplace health coverage at the beginning of the year.

Based on her expected annual household income, she qualifies for financial assistance that significantly reduces her monthly health insurance premium.

Then, halfway through the year, Sarah receives a promotion and a substantial raise.

Great news! But Sarah forgets to update her Marketplace application.

For the remainder of the year, financial assistance continues to be paid toward her health insurance based on her old income estimate.

When Sarah files her tax return, her actual annual household income is higher than the estimate used to calculate her advance premium tax credit.

She discovers that she received more financial assistance than she ultimately qualified for.

For 2026 coverage, that difference may have to be repaid in full.

Sarah is hypothetical, but the situation is very real. That's why reporting an income change isn't simply paperwork. It can potentially affect your tax bill.

Don't Wait: Georgia Access Says Report Changes Within 30 Days

For Georgia residents enrolled through Georgia Access, changes to the information on your application should be reported within 30 days of the event.

That includes changes in income as well as certain changes to your household or circumstances. Why does 30 days matter?

Because the longer your application reflects outdated information, the longer the amount of financial assistance being paid toward your coverage could potentially be based on information that is no longer accurate.

30 DAYS

That's an important number for Marketplace clients to remember. Don't wait until Open Enrollment. Don't wait until December. And definitely don't wait until you prepare your tax return the following spring.

When your circumstances change, your Marketplace information needs to change with them.

It's Not Just Your Paycheck That Can Affect Your Income

This is where many people can get caught off guard.

When we say, "income changed," most people immediately think about getting a raise or changing jobs.

But your Marketplace household income calculation can be affected by other sources of income, too.

Depending on your circumstances, significant income changes could come from:

• A raise, bonus or additional work hours
• Starting a new job
• Losing a job or having your hours reduced
• Self-employment or side-business income
• Unemployment compensation
• Certain Social Security income
• Taxable retirement distributions
• IRA withdrawals
• Investment income
• Capital gains from selling investments
• The sale of stocks, bonds or cryptocurrency
• Certain canceled or forgiven debt
• Changes in the income of other members of your tax household

That's why it's important to look at your expected annual household income, not simply the amount deposited into your checking account every payday.

The Retirement Withdrawal Surprise

Here's another situation people may not immediately associate with their health insurance.

Suppose Mark is 62 and retired early. He purchases health insurance through the Marketplace until he becomes eligible for Medicare.

His projected income qualifies him for a premium tax credit. Later in the year, Mark decides to take a substantial taxable distribution from his traditional IRA or 401k to pay for a home renovation.

He may think:

"What does my IRA or 401k have to do with my health insurance?"

Potentially, quite a bit. A taxable retirement distribution may increase the household income used to determine his premium tax credit.

If Mark doesn't account for that change, he could discover at tax time that he qualified for less financial assistance than he received during the year. This is an important reason people who are retiring before age 65 should coordinate decisions about health insurance, retirement income and taxable distributions.

What If Your Income Goes Down?

Not every income change results in receiving less assistance.

Sometimes an update can work in your favor.

Imagine that you:

• Lose your job
• Have your hours reduced
• Experience a significant decline in self-employment income
• Retire
• Lose another source of household income

A lower projected household income could potentially make you eligible for additional premium assistance, which could reduce what you pay toward your monthly health insurance premium.

Depending on your circumstances, household size and income, an update could also affect eligibility for other programs.

Georgia Access notes that reported changes can affect eligibility for financial assistance, cost-sharing reductions, Georgia Medicaid and PeachCare for Kids®.

In other words:

Reporting a change isn't only about avoiding money you might owe later. It could also help make sure you receive assistance you're currently eligible for.

Marriage Can Change More Than Your Last Name

Income isn't the only information that matters. Getting married can change your tax household and combine financial circumstances in ways that affect Marketplace eligibility.

The same is true when a baby is born, someone is added or removed as a dependent, you divorce, or your household otherwise changes.

Consider a couple who gets married in June. Before marriage, one spouse receives Marketplace financial assistance based on an individual household and income.

After marriage, the household circumstances may be very different. If they don't report the change, the Marketplace may continue using outdated information to determine the amount of financial assistance.

Marriage, divorce, births and changes in dependents should trigger another thought: "Do I need to update my health insurance?"

What Happens at Tax Time?

This is where everything comes together.

If Advance Premium Tax Credits were paid toward your Marketplace coverage, you generally receive Form 1095-A, Health Insurance Marketplace Statement.

That information is used with IRS Form 8962, Premium Tax Credit, when you file your federal income tax return.

Form 8962 compares the premium tax credit paid in advance during the year with the amount you qualify for. Think of it as a year-end true-up.

If you received less assistance than you qualified for:

The difference may increase your tax refund or reduce the amount of tax you owe.

If you received more assistance than you qualified for:

You may have to repay the excess.

And for tax years after 2025, the previous federal repayment caps no longer apply.

That is one of the most important changes Marketplace consumers need to understand for 2026.

Another Important Deadline: Don't Ignore Your Tax Return

Receiving Advance Premium Tax Credits also creates an important responsibility at tax time.

If APTC was paid on behalf of you or someone in your tax family, you generally must file a federal income tax return and complete Form 8962 to reconcile those advance payments, even in some circumstances when you otherwise wouldn't have been required to file a tax return.

Failing to properly reconcile your premium tax credit can affect your ability to receive advance financial assistance for future Marketplace coverage.

So don't toss your Form 1095-A into a drawer and forget about it.

It's an important tax document.

Five Times You Should Stop and Review Your Marketplace Application

Think of these events as health-insurance checkpoints:

1. Your income changes.
Raise, bonus, job loss, reduced hours, new job or significant self-employment income.

2. Your household changes.
Marriage, divorce, birth, adoption or a change in dependents.

3. You gain access to employer coverage.
An offer of job-based health insurance can affect Marketplace financial-assistance eligibility even if you don't immediately enroll in the employer plan.

4. You're preparing to retire.
Retirement can involve several changes at once, loss of employer coverage, changes in income and potentially retirement-account withdrawals.

5. You're becoming eligible for Medicare.
Don't assume Marketplace coverage and its financial assistance should simply continue after Medicare eligibility begins. This transition should be reviewed carefully and in advance.

Your 30-Day Marketplace Checklist

When something changes, don't just think about your paycheck.

Ask:

Has my expected annual household income changed?

Did my household size change?

Did I gain or lose access to other health coverage?

Did I receive a large taxable distribution or other unexpected income?

Could this change affect the financial assistance I'm receiving?

If the answer to any of these questions is yes, or you're simply unsure, reviewing your Marketplace information sooner rather than later can help prevent problems.

Don't Let Tax Season Be the First Time You Discover a Problem

One of the biggest mistakes Marketplace consumers can make is assuming:

"I'll just straighten everything out when I file my taxes."

By then, an entire year of financial assistance may have already been paid based on an outdated income estimate.

For 2026, that matters even more because excess Advance Premium Tax Credits are no longer protected by the previous federal repayment caps. The better approach is to make adjustments during the year, when there is still time to update the assistance being applied to your coverage.

What About Medicare?

Income matters with Medicare, too, but the rules are very different.

Higher-income Medicare beneficiaries may pay an Income-Related Monthly Adjustment Amount (IRMAA) in addition to their standard Medicare Part B premium and/or their Part D costs.

Unlike Marketplace financial assistance, Medicare generally looks back at income reported on a prior tax return when determining IRMAA. That's another reason the transition from Marketplace coverage to Medicare deserves careful planning. The rules change and so can the financial consequences.

The Bottom Line: Your Health Insurance Should Change When Your Life Does

Marketplace health insurance isn't something you should necessarily enroll in once and ignore for the rest of the year. Your financial assistance is based on information about your household and expected income. When that information changes, your eligibility can change with it.

Remember these three things:

·      Your financial assistance is based on an estimate.

·      Georgia Access requires application changes to be reported within 30 days.

·      For 2026, excess Advance Premium Tax Credits generally must be repaid in full when you reconcile your credit at tax time.

A raise, job change, marriage, retirement distribution or change in household income might not seem like a health insurance event.



But it can be.

At Crawford Benefits, we're here to help our clients understand how life changes may affect their health insurance coverage and what steps may need to be taken.

If you've recently experienced an income or household change, or you're expecting one, don't wait until tax season to find out how it could affect your coverage.

Contact our office so we can help you review your situation and determine what information may need to be updated.

A 30-day update today could help prevent a much bigger surprise tomorrow.