What this line means
The maximum amount of excess advance PTC you must repay. If your household income is below 400% of the federal poverty line, the IRS caps how much you owe back. Look up the cap in the Repayment Limitation Table using your filing status and your line 5 percentage. If your income is at or above 400% of the federal poverty line, there is no cap — you repay the full excess from line 27.
Does this apply to you?
- You have an excess advance PTC amount on line 27
- Your household income is below 400% of the federal poverty line
- You want to determine the maximum amount you must repay
Easy to overlook
The caps are significantly lower for single filers than joint filers The repayment limitation table has different caps based on filing status. Married filing jointly filers have caps roughly double those for single filers at the same income percentage. A single filer below 200% of the poverty line has a cap in the hundreds of dollars, while a joint filer at the same income level has a cap roughly double that amount. Filing status matters here. 1 IRS Form 8962 Instructions — Line 28
The cap protects you even when the excess is large If your advance payments exceeded your actual credit by $3,000 but the repayment cap for your income level is $900, you only repay $900. The remaining $2,100 is forgiven. Filers with modest incomes who had a significant income change sometimes assume they owe the full excess and do not realize the cap limits their liability. 2 IRS Publication 974 — Premium Tax Credit
Watch out for this
If your household income reaches 400% of the federal poverty line or higher, the repayment limitation does not apply. You repay the full excess from line 27 with no cap. This is a cliff — at 399% of the poverty line, you have a cap. At 400%, you do not. A small increase in income near this threshold can dramatically increase your repayment. If you are close to 400%, check whether a deductible IRA or HSA contribution can bring your modified AGI below the cutoff.
Footnotes
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IRS Form 8962 Instructions, Line 28, Repayment Limitation Table. https://www.irs.gov/instructions/i8962 ↩
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IRS Publication 974, Premium Tax Credit, Repayment Limitation. https://www.irs.gov/pub/irs-pdf/p974.pdf ↩