NEWS: With the new year, things have changed, or will change, regarding credit reporting, government benefits, student loans, and more.

WHAT IT MEANS TO YOU: There is likely something new this year that will affect your bottom line.

Is one of your New Year’s resolutions to budget this year? By all means, do it! Just be sure you take into account some of the changes in the consumer world that may affect where or how your money goes.

These changes may have a direct impact on your finances, or they may affect other people, but the ripples may lap up against your finances sooner or later. We’ve included a few tax policy changes, in case you’re an early bird, but for more information on filing your taxes this year, we’ll have our annual It’s Your Money tax filing tips later this month.

Some changes are big, some small. Let’s take a look at some of this year’s changes for consumers:

Affordable Care Act insurance premiums

If you get your health insurance through ACA, you’ve already paid your first premium this year. It may be a lot higher if your income is 400% of the federal poverty guideline and you previously got the enhanced ACA tax credit.

If you no longer get the tax credit because your income is above that level, and wonder what the status is of efforts to reinstate it, there’s good news and not-so-good news.

The good news: On Jan. 8, the House voted to extend the enhanced credits for another three years.

The not-so-good news: The extension is in front of the Senate, where it must get 60 votes (out of 100 senators) to pass. The Senat is negotiating a bipartisan compromise, which will likely lead to more restrictions on ACA enrollees who make 400% of the FPG if it passes.

The tax credit still exists for enrollees whose income is less than 400% of the FPG, about half of the 40 million Americans who got ACA health insurance last year. In 2026, 100% of the FPG is $15,960, so 400% is $63,840. The amount rises by $5,500 per person in a household, up to family of eight.

The tax credit that expired on Dec. 31 and is being debated in Congress is the enhanced credit that was added by the American Rescue Plan in 2021. Congress had to extend it or make it permanent, or it would expire at the end of 2025.

Many legally-residing immigrants are no longer eligible for ACA, including:

Legally living in the U.S. under DACA
Refugees and asylum-seekers with humanitarian status
Survivors of trafficking and domestic violence who have pending or approved T visas or have petitioned for legal status under the Violence Against Women Act.
Those with valid Temporary Protected Status visas
Lawfully residing immigrants who earn less than 100% of the federal poverty level and are not covered by Medicaid.

Here’s how ACA tax credits work:

ACA provides a tax credit to enrollees that ensures their health insurance premium isn’t more than 8.5% of their income. A tax credit reduces the amount of tax a person owes, which is not the same thing as a deduction, which decreases taxable income before the tax bill is calculated.

The original ACA, which went into affect Jan. 1, 2011, provided the credit for anyone whose income was between 100% and 400% of the FPG (those who make less than 100% of the federal poverty guideline get Medicaid).

The credit is applied monthly to lower an ACA enrollee’s premium to 8.5% of their income. Enrollees choose their health care insurance from the “marketplace,” where most major insurers are represented.

To fully understand what ACA is, what kind of health insurance those who are voting on extending the enhanced tax credits get, and what kind of subsidies help fund employment-based insurance, read December’s It’s Your Money. For more on other ACA changes, check out last July’s column about the new tax bill.

Auto loan tax deduction

Anyone who takes out a loan for a vehicle that had final assembly in the U.S. can deduct the interest for tax years 2025-2028. The vehicle must be a new, personal-use vehicle. The maximum amount that can be deducted for those with an income below $100,000 is $10,000. The maximum decreases for higher incomes.

Buy now, pay later plans

Buy now, pay later plans will be reported to the three credit reporting bureaus for the first time.

This can be good news or bad news – it all depends on how good you are about paying your bills and managing your credit.

It’s good news if you make on-time payments, which is the biggest factor that affects a credit score. They’ll also add to your credit mix, which also has a positive impact on a credit score.

It’s bad news if you can’t make the payments, or it increases your debt substantially. This will have an impact on your credit score. So will doing it too often – those credit hard pulls add up and can sink a credit score.

Electric vehicle incentives

Installing an electric vehicle charging station at your home? Do it by June 30 if you want to get the $1,000 tax credit.

If you’re buying one, you’re too late for tax credits. The tax incentives for buying a new or used EV ended Oct. 1.

Federal Poverty Guideline

The Federal Poverty Guideline is set each year by the U.S. Department of Health and Human Services, and is used for everything from calculated federal benefits like ACA, SNAP and Medicaid and qualification for rental assistance, to determining how much rent a developer can charge for affordable housing. It increases with household size.

The poverty guidelines are calculated annually by comparing the average monthly Consumer Price Index-U for the current year with the average monthly one for the year before. The annual FPGs do not calculate age of household members or other demographics, so are different from the poverty statistics published by the U.S. Census Bureau.

The 2026 FPGs are:

An individual is $15,960;
Household of two, $21,640;
Three, $27,320;
Four, $33,000;
Five, $38,680;
Six, $44,360;
Seven, $50,040;
Eight, $55,720;

The amount increases $5,500 for each additional household member.

IRS Direct File

IRS Direct File, the free and hugely popular online tax filing system that launched two years ago, has been eliminated by the Trump administration.

IRS Direct File was launched as a pilot in 12 states, including New Hampshire, in 2024, and was expanded to 25 states last year. It was different from IRS Free File, which still exists, in that the income limit is higher and it used the IRS’s own guided software, not that of a private tax company.

For years, people had been saying it was nuts that the IRS didn’t have a platform that could do what, say, Turbo Tax does. Only not upcharge people, but be truly free. So they created one. The program allowed taxpayers with simple returns who take the standard deduction to file directly online for free.

The Trump administration claimed that not enough people were using it, and that it cost too much to operate.

The Center for Taxpayer Rights found, however, “The Trump administration meaningfully sabotaged Direct File usage during the season, significantly depressing trust and usage. The Coalition for Free and Fair Filing has already pointed out how the new administration abandoned plans to promote and market Direct File, which were vital for a new program; instead, the administration’s top communication about Direct File was the false claim that the program did not exist, misinformation that the IRS did not correct.”

That’s all too bad, because 2026 plans were for a “vastly expanded tax scope, likely supporting gig economy and self-employment income; education credits and scholarship income; gambling income; dividend income; and more. Before the uncertainty introduced by the administration, many more states were on track to join Direct File. And, of course, the tax filing experience was poised to be revolutionized by the expansion of data import.” Which the center said would “eventually build to a wholesale transformation of the filing process.”

Despite the sabotage, more than 300,000 taxpayers in the 25 states that offered it last year used it, with 94% rating their experience was “excellent” or “above average.”

One reason IRS Direct File was launched, by the way, is because Turbo Tax, which had agreed to be part of the IRS Free File program, which has an income limit and partners with for-profit online tax prep companies, was making IRS Free File virtually impossible to find for people who qualified. Turbo Tax had to pay a $141 million settlement in 2022 for charging customers who were eligible for IRS Free File, but not telling them they were. This included charging a fee to people for things like not having health insurance or being self-employed when they qualified for Free File and would not have had to pay those fees.

The Center for Taxpayer Rights said in its report, “Direct File strengthens the tax system, boasting industry-leading submission accuracy, and minimal fraud.”

Returns that are e-filed may be automatically rejected for failing basic business rule validation run by the IRS, and the taxpayer then has to edit and resubmit the return, which causes delays or just giving up. The Center found, “Direct File successfully deployed a variety of tools — including access to IRS data — to help taxpayers ‘get it right the first time’, with 91.2% of returns accepted on the first attempt, the highest of any DIY tax prep tool.”

The report also found that “fraud and identity theft remained ‘negligible.’ Direct File’s tax accuracy — the fraction of returns for which Direct File performed all tax calculations correctly — was 100%.

We’ll look more at tax filing later this month, but if you don’t want to wait for that, there are still several ways to file your taxes without being upcharged.

Private Mortgage Insurance tax deduction

Private Mortgage Insurance, which you must pay if you put down less than 20% on a home purchase, is tax deductible, something it hasn’t been since the 2021 tax year. It will be treated the same when filing taxes as mortgage interest is. It phases out the higher your income is – beginning at $100,000 adjusted gross income for a single-filer, $200,000 for a joint filer.

SNAP benefits

SNAP eligibility for many people has changed because of new work requirements and eliminating benefits for many classes of immigrants who are in the country legally. The federal rules went into effect in New Hampshire last fall.

There’s possibly more to come, with several bills in the Legislature this year adding to the work requirements, restricting what SNAP recipients can purchase with their benefit and limiting how often a recipient can use their SNAP EBT card out of state.

With the federal changes, those who must comply with new SNAP work requirements in order to get more than three months of benefits in a 36-month period are all adults between 19 and 64 who are able bodied with no dependents. This includes parents with children age 14 or older in the house.

Work requirements now also include people who were previously exempt:

Individuals experiencing homeless
Most veterans
Foster youth who have recently aged out of the system.

The requirements are for 80 hours of paid work or volunteer work a month, or participation in a training program. Previously exempt groups can ask for an exemption, but must file increased paperwork and must meet work requirements until the exemption is approved.

No longer eligible for staff are legally residing immigrants with the following status:

Legally living in the U.S. under DACA
Refugees and asylum-seekers with humanitarian status
Survivors of trafficking and domestic violence who have pending or approved T visas or have petitioned for legal status under the Violence Against Women Act.
Those with valid Temporary Protected Status visas.

For a full look at how SNAP has changed, read last year’s column on the topic.

Social Security COLA, Medicare B

The cost-of-living adjustment for Social Security benefits increased 2.8% beginning with January payments.

The average $56 in monthly benefit, though, will likely be offset for Social Security beneficiaries by the increase in the standard Medicare B premiums, which are now $202.90, up from $185, for those whose adjusted gross income is $109,000 or less. The premium rises with income.

Student loans

We took an in-depth look at the U.S. Department of Education changes to student loans way back in March. But, in brief, some of the biggest changes in 2026 for borrowers who already have federal student loans are:

The federal government will once again garnish wages to force repayment on defaulted federal student loans. That means that they can take a portion of the borrower’s paycheck, without a court order.
The American Rescue Plan Act allowed student loan discharges and cancellations to not be considered income that could be taxed, beginning Jan. 1, 2021, but beginning this month, that changed. A balance of a federal student loan that’s discharged or cancelled now counts toward taxable income in most cases.
Borrowers on the now-defunct SAVE plan will be moved are being moved to other options, likely with higher payments, due to court challenges.
Income-Based Repayment eligibility for “partial financial hardship” has been eliminated

Beginning July 1, changes that will affect all borrowers go into effect, including:

Anyone taking out a student loan will only have a choice of two repayment plans – the new standard plan with fixed monthly payments or the Repayment Assistance Plan. This applies to new borrowers as well as those who already have loans who take out a new one as well as borrowers who consolidate their loans into a new Direct Consolidation Loan beginning July 1.

The Public Service Loan Forgiveness plan allows the balance of the loan to be forgiven after 10 years of on-time payments for people who go into certain public and community service careers. Changes to the PSLF allow borrowers to be disqualified if their employer has engaged in activities that the secretary of education deems to have a “substantial illegal purpose’ related to discrimination, immigration, terrorism, transgender youths, or state trespassing, public nuisance, disorderly conduct, vandalism, and obstruction laws.”

The Trump administration has also redefined the status of several jobs, including nursing and other health-related ones, teaching, social work, and others that will make it more difficult for borrowers going into those fields to qualify for the program.

You can reach Maureen Milliken at mmilliken@manchesterinklink.com.