400 FPL subsidy cliff 2026

What the cliff is

Premium tax credits are calculated on a sliding scale below a certain income limit. The scale uses the federal poverty guidelines and the applicable percentage table. Above the limit, the credit generally stops rather than tapering to zero.

That stopping point is the cliff. A household below the line can receive help. A household above the line can lose it, even if the income difference is small. The cliff is the reason a year-end bonus, a capital gain, or a Roth conversion can change a Marketplace result.

The cliff is not the only thing that determines the credit. Below the line, the benchmark premium and the applicable percentage still matter. A household can be under the cliff and still owe a substantial monthly premium.

ACA subsidy cliff extension 2026

The enhanced subsidy provisions are shown as expired in the current data layer. For 2026, the working assumption is that premium tax credits are generally limited to households at or below 400 percent of the poverty line. A household above the line should not assume an extension applies.

The law can change. A news article, a campaign proposal, or an old guide is not a substitute for the current statute and the official Marketplace page. Check the status before you make an income decision that depends on a subsidy.

If an extension is enacted, the cliff may move or disappear for a period. The data layer and this guide would need a new official source and a new checked date before the page could say so. Until then, the conservative reading is the one in the data.

The dollar limits by household size

The table below multiplies the 2025 poverty guideline by four. It is the income line for 2026 coverage under the current rules. Alaska and Hawaii use higher guidelines, and the table adds an amount for each person above eight.

| Household size | 400 percent limit | | --- | --- |

1$62,600.002$84,600.003$106,600.004$128,600.005$150,600.006$172,600.007$194,600.008$216,600.00

A household of 3 reaches the line at $106,600.00. The applicable percentage at the top of the range is 9.96%. The expected contribution toward a benchmark plan at the line is $10,617.36 for the year.

What counts toward the limit

The limit is based on modified adjusted gross income for the tax household. It is not based on take- home pay, and it is not based on the income of the applicant alone. Add the income items the Marketplace instructions include, and use the household members who belong on the tax return.

A one-time event can push a household over the line. A severance payment, a retirement distribution, a business sale, or a Roth conversion can all raise MAGI. A tax-exempt interest payment can raise it even though it is not taxable in the usual sense.

Do not assume that a deduction you claim on the return is ignored. The starting point is adjusted gross income, so deductions that reduce AGI can help. Deductions that do not reduce AGI may not. Use the official income page for the specific items.

What to do near the line

If your estimate is near the cliff, build a cushion. A projection that lands exactly on the line can cross it after a late dividend or a corrected form. A small cushion reduces the risk of losing the credit because of an unexpected payment.

Ask whether a contribution to a health savings account, a retirement plan, or another tax-advantaged account can lower MAGI. Ask whether a planned distribution can move to a different year. These are tax decisions, so use a tax preparer.

Do not hide income or understate the projection to stay under the line. The credit is reconciled on the tax return, and a wrong estimate can create a repayment. The goal is an accurate projection, not a clever one.

Worked example

A household of 3 expects $106,600.00 of MAGI. That is exactly 400 percent of the 2025 guideline. At the line, the applicable percentage is 9.96%. The expected annual contribution toward a benchmark plan is $10,617.36.

A household just above the line, at $106,601.00, generally falls outside the credit range under the current rules. The one-dollar difference can remove the credit, which is why the cliff is a planning issue rather than a rounding issue.

The actual credit at the line still depends on the benchmark premium for the household. This page does not invent a benchmark premium. It shows the income line, the contribution, and the rule that changes at the line.

Why the benchmark premium matters

The 400 percent line decides whether a household can receive a premium tax credit. It does not decide the dollar amount. Below the line, the credit is the difference between the benchmark plan premium and the household’s required contribution.

The benchmark is a specific plan used for the calculation, not the plan the household necessarily buys. A household can choose a cheaper plan and pay less, or a more expensive plan and pay the difference. The credit is tied to the benchmark, so the plan choice changes the out-of-pocket cost.

The cliff is also not a coupon. Being under the line does not mean the coverage is free, and being over the line does not mean the household has no options. A household above the line can still buy a plan at full price, use an employer offer, or qualify for Medicaid in some states. The credit is one path, not the only path.

That is why this page does not show a single credit amount. The income limit and the contribution are computable from the data layer. The benchmark premium is plan-specific and changes by area. Use the official Marketplace tools for the dollar estimate.

A checklist for a household near the line

Project the income before the year ends. Include every income source the Marketplace counts. Compare the projection with the 400 percent limit for the household size. Write down the headroom.

If the headroom is small, review planned distributions, capital gains, and conversions. Ask whether a contribution to a tax-advantaged account can lower MAGI. Ask whether a payment can move to another year. Do not hide income or understate the projection.

Update the Marketplace if the income changes during the year. Keep the estimate, the documents, and the application confirmation. At tax time, compare the credit received with the credit allowed. A reconciliation is easier when the records are complete.

ACA subsidy income limit 2026

The income limit is not one number for every household. It is 400 percent of the federal poverty guideline for the household size, using the prior-year table. A single person, a couple, and a family of four each have a different dollar line even though the percentage is the same.

That distinction matters when someone asks whether a raise will cost them the credit. A raise of a few thousand dollars can be harmless for a household with a large cushion and decisive for a household already near the line. The household size and the projected MAGI have to be checked together.

The limit also interacts with Medicaid. In a state that expanded Medicaid, a household below the credit range may qualify for Medicaid instead. In a state that did not expand, the same household may fall into a coverage gap with neither Medicaid nor premium tax credits. The Marketplace application sorts through the options, but the result depends on the state.

Do not compare your income with a national headline figure. Use the table for your household size, your state's guideline if you live in Alaska or Hawaii, and the prior-year poverty table that the Marketplace applies. Then compare the result with the benchmark premium and the applicable percentage. The limit tells you whether help is available. It does not tell you the amount.

If the projection is close to the line, write down the headroom and the date. A later bonus, distribution, or corrected tax form can change the answer. The Marketplace can update the application, and the tax return reconciles the credit. A written estimate makes that conversation easier.

The line is a planning input, not a promise about next year. Keep the calculation with the application so a later review can see why the estimate was reasonable at the time.

Three honest caveats

1. The 400 percent line is a rule under the current data, not a permanent feature of the law. Check the current statute before you rely on it.
2. The cliff uses MAGI and the tax household, not gross pay and the applicant alone.
3. This page does not calculate a premium tax credit. It explains the income limit and the contribution at the top of the range.

Frequently asked questions

What income is the 400 percent FPL limit based on?

It is based on modified adjusted gross income for the tax household. The Marketplace uses the prior-year poverty guideline for the coverage year.

What is the 400 percent FPL limit for a family of four?

For 2026 coverage, the limit is $128,600.00, based on the 2025 guideline.

Did the enhanced subsidies create a different cliff?

The enhanced provisions are shown as expired in the current data. Under the current rules, credits generally end above 400 percent of the poverty line.

Does a Roth conversion count toward the cliff?

A taxable Roth conversion generally raises modified adjusted gross income in the conversion year. It can push a household over the line.

What happens if I go over the cliff during the year?

Update the Marketplace when your income changes. The credit is reconciled on the tax return, and a household above the limit may have to repay some or all of the credit.

Does Alaska or Hawaii use the same limit?

No. Alaska and Hawaii have higher poverty guidelines, so the dollar limit is higher. Use the official table for those states.

Source table

Figure	Value used	Official source
Poverty guidelines	$15,650.00 for one person	HHS poverty guidelinesChecked October 28, 2026
Applicable percentage	9.96%	IRS affordability revenue procedureChecked October 28, 2026
Enhanced subsidy status	expired	Congressional Research ServiceChecked October 28, 2026
Marketplace savings	Premium tax credit rules	HealthCare.gov savings pageChecked October 28, 2026

What to do next

Use the employer coverage affordability calculator if a job-based offer is also on the table. Read what income is used for marketplace subsidies for the MAGI rules, and the family glitch fix explained guide if family coverage is the issue.