Advance Tax Credits: Reconciliations and Repayments

David Splinter, James Elwell and Lin Xu

National Tax Journal, 2026, vol. 79, issue 1, 73 - 106

Abstract: Advance tax credits may require recipients to repay excess amounts. Policymakers have limited information about these repayments, their distributional impact, and the cost of repayment protections. We estimate these using tax data across four advance credits: health-insurance premium tax credits, child tax credits, earned income tax credits, and stimulus checks. Advance credit repayments usually result from income increases across credit phaseouts. Credits targeting lower-income families have phaseouts affecting many people with income increases, resulting in higher repayment rates. We discuss how advancing credits can contribute to noncompliance and introduce an approach to evaluate advance tax credit proposals.

Date: 2026
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