--- title: What to Do When Your Income Changes url: https://www.tnhealthcoverageexplained.org/costs/income-changes description: A raise, job loss, or new baby changes your health insurance tax credit. Report income changes promptly to HealthCare.gov to avoid owing money at tax time. last_verified: 2026-10-17 publisher: TN Health Coverage Explained (independent; does not sell insurance) --- # What to Do When Your Income Changes Your marketplace tax credit was calculated from the income you *estimated*. Life doesn't follow estimates — raises, job losses, new household members, marriages, and divorces all change the math. Report them promptly, and you'll be protected. Ignore them, and tax time can hurt. ## Report changes to HealthCare.gov promptly Log into your HealthCare.gov account and update your application whenever your household changes: - A raise, new job, or job loss - Hours cut or increased - A new baby or adopted child - Marriage or divorce - A household member moving in or out **Why prompt matters:** your advance premium tax credit gets recalculated on the new income right away. That adjusts what you pay month to month — and it protects you at tax time, when the IRS reconciles what you received against what you actually earned. A raise you report in March is a small monthly adjustment; a raise you report next April is a tax bill. > **Answer every data-matching notice.** If HealthCare.gov can't confirm the income you reported, it will send a notice asking for documents. Respond by the deadline. After a July 2026 court order, CMS reinstated the automatic 60-day extension for resolving income mismatches, but ignoring the notice can still cost you your tax credit. ## How reconciliation works at tax time When you file your taxes, the IRS compares the advance credit you received against the credit you were actually eligible for: - **Earned more than you estimated → you may owe some of the credit back.** This is called excess advance credit repayment. - **Earned less than you estimated → you may get additional credit** when you file. > **No more repayment cap.** Starting with tax year 2026, federal law (Public Law 119-21, section 71305) removed the caps that used to limit how much excess advance credit lower-income households had to pay back. Now **you repay the full excess amount** at tax time. Reporting a raise promptly is the single best way to avoid a large bill. ## Don't confuse income changes with payment changes These are two separate errands, and mixing them up causes real problems: - **Income change → HealthCare.gov** (updates your tax credit) - **New card or bank account → your insurer** (keeps autopay working) See [How to Pay Your Premium](https://www.tnhealthcoverageexplained.org/costs/how-to-pay) for the payment side. --- ## Frequently asked questions **What counts as an income change I need to report?** Anything that changes household income or size: raises, job loss, changed hours, a new baby, adoption, marriage, divorce, or a household member moving in or out. When in doubt, report it — over-reporting is safe, under-reporting isn't. **I got a raise mid-year. Will I owe money at tax time?** Possibly — if the raise means you received more advance credit than you were eligible for, some of it may have to be repaid. Reporting the raise promptly recalculates your credit and shrinks the tax-time hit. Exact repayment rules for post-2025 tax years are still being verified; confirm with HealthCare.gov or a tax preparer. **I lost my job. What should I do first?** Report the income drop to HealthCare.gov immediately — your credit will increase and your monthly premium will drop. You may also qualify for TennCare if your income falls far enough, and TennCare enrolls year-round. **What are data-matching notices?** When the information you reported doesn't match what federal data sources show, HealthCare.gov may send a notice asking you to provide documentation. Respond to them — 2027 brings more of these checks, and ignoring a notice can affect your coverage or credits. **Does reporting an income change affect my autopay?** No — your tax credit is recalculated, but your insurer still bills you directly. If you change payment methods, update that separately with your insurer. --- ## Sources - Healthcare.gov: reporting changes to your marketplace application - Healthcare.gov: premium tax credit reconciliation at tax time - IRS guidance on the premium tax credit (Form 8962 instructions) --- **Your next step:** Log into HealthCare.gov today and check whether your application still matches your life — and if the income bands themselves are new to you, start with [Subsidies in Tennessee for 2027](https://www.tnhealthcoverageexplained.org/costs/subsidies).