Taxpayers could owe more in 2027 as health subsidies expire

RICHMOND, Va. (WRIC) — Millions of Americans who saw their health insurance subsidies expire on Jan. 1 could end up owing more money when they file their taxes.

Lawmakers failed to reach an agreement to extend Affordable Care Act tax credits before they expired at the start of the year, leaving many households facing higher costs.

According to community advocates, the financial impact could possibly be felt during the 2027 tax season. Breanne Armbrust, executive director of the Neighborhood Resource Center, said the loss of these credits places a significant burden on families already struggling to make ends meet.

“Thousands of Virginians are being left behind," Armbrust said. These areas where people are being affected are part of a person’s quality of life."

The expiration of the tax credits means many Americans may have to pay more out of pocket during tax season. Health insurance premiums have increased for those who relied on the subsidies, and some may also owe additional taxes.

“Most of the individuals that we see who qualify for Affordable Care Act tax credits tend to be in a precarious financial situation," Armbrust said. Those tax credits provide some relief during tax season."

The credits are advanced subsidies based on estimated annual income. When tax returns are filed, the IRS reviews whether recipients qualified. If income ended up being higher than estimated, taxpayers could be required to pay money back.

Armbrust added that losing access to affordable health insurance is another major consequence of the expired credits.

“We really have put people in a circumstance where they’re having to choose among the most basic needs of human dignity,” Armbrust said. “There’s a lot of opportunity in this country, but individuals can no longer pull themselves up by their bootstraps. We need to stop leaving people to figure it out on their own,” Armbrust said.

Financial experts recommend speaking with a financial coach and closely monitoring expenses to help manage potential increases in taxes or insurance costs.