The 400% Subsidy Cliff Is Back in 2026 (and How to Stay Under It)
For five years there was no hard income limit on ACA subsidies. That changed for 2026: the 400% cliff is back, and it's unforgiving. Cross it by a single dollar and your premium tax credit drops to zero. Here's where the line sits this year, why it returned, what it can cost, and the levers that pull you back under it.
- In 2026 the premium tax credit ends abruptly at 400% of the Federal Poverty Level.
- That's about $62,600 (household of one) to $128,600 (household of four) for 2026 coverage.
- One dollar over and your subsidy is $0 — which can mean thousands of dollars a year.
- You can often get back under by lowering your MAGI: pre-tax retirement, an HSA, or the self-employed health deduction.
What the cliff is
Premium tax credits phase in based on income: the less you earn, the more help you get. Up to a point. In 2026, that point is 400% of the Federal Poverty Level (FPL) — and it's a cliff, not a ramp. Just under it, you might receive a substantial credit; just over it, the credit is exactly zero and you pay your plan's full price. There's no gradual phase-out at the top.
The 2026 thresholds
Eligibility for 2026 coverage uses the 2025 Federal Poverty Guidelines (a coverage year uses the prior year's figures). For the 48 contiguous states and DC, 400% of FPL is:
| Household size | 100% of FPL | 400% of FPL (the cliff) |
|---|---|---|
| 1 | $15,650 | $62,600 |
| 2 | $21,150 | $84,600 |
| 3 | $26,650 | $106,600 |
| 4 | $32,150 | $128,600 |
| 5 | $37,650 | $150,600 |
Alaska and Hawaii use higher guidelines. The figure that matters is your household's Modified Adjusted Gross Income (MAGI) for the coverage year.
Why it came back
From 2021 through 2025, the American Rescue Plan and then the Inflation Reduction Act temporarily removed the cap. Instead of a hard cutoff, anyone over 400% of FPL could still get a credit if the benchmark plan would cost more than 8.5% of their income. Those enhanced rules expired on December 31, 2025. With no extension, 2026 reverts to the pre-2021 law — and the 400% cliff came back with it.
See exactly where you stand
Our ACA Subsidy Calculator shows your income as a percent of poverty, how many dollars you are from the 400% cliff, and the credit at stake if you cross it.
Check my distance to the cliff →What it can cost
The cliff is brutal precisely because it's all-or-nothing. Imagine a 60-year-old couple whose benchmark plan runs $1,800/month. Just under 400% of FPL, they're expected to pay 9.96% of income toward it and the credit covers the rest — often $10,000–$20,000 a year of help. One dollar over 400%, and that entire credit vanishes; they owe the full premium. The older you are and the higher your area's premiums, the larger the drop — which is why people near the line should estimate income carefully.
How to stay under
The cliff is about MAGI, and several common moves reduce it. If you're close to 400%, these can restore the entire credit:
- Traditional retirement contributions. A traditional IRA, or — for the self-employed — a SEP-IRA or Solo 401(k), lowers AGI and therefore MAGI.
- Health Savings Account (HSA). If you have an HSA-eligible plan, contributions are above-the-line deductions.
- The self-employed health insurance deduction. If you're self-employed, your premiums may be deductible — which lowers MAGI, which can raise your subsidy. (That one's circular; our Self-Employed Health Deduction calculator solves the loop.)
- Timing. Deferring a Roth conversion, capital gain, or year-end bonus out of a borderline year can keep you under.
Because it's a cliff, the math is unusually rewarding near the edge: a few thousand dollars of pre-tax contributions can be worth many thousands in restored credit.
The repayment trap near the line
One more 2026 wrinkle. If you take the credit in advance based on an income estimate under 400%, and your actual income lands over 400%, you have to pay the advance credit back when you file. And under a 2026 law change (OBBBA), the old repayment cap is gone — so if you cross the cliff, you repay the full amount, with no limit. Near the line, that's a strong argument for estimating conservatively, or taking less in advance and claiming the rest at tax time. See how reconciliation works.
Run your numbers
Enter your income, household, and ZIP code to see your credit, your percent of poverty, and how much room you have before the cliff.
Open the ACA Subsidy Calculator →Frequently asked questions
Is the 2026 subsidy cliff permanent?
It's the law as it stands for 2026. Congress could restore enhanced subsidies, but unless and until that happens, the 400% cliff applies. We update this page if the law changes.
What's 400% of poverty for my household?
See the table above — roughly $62,600 for one person up to $128,600 for a family of four, for 2026 coverage in the contiguous states.
Does lowering my income really restore the whole subsidy?
If it brings your MAGI to 400% of FPL or below, yes — the credit is reinstated. Just over the line it's $0; just under, it's the full calculated amount.
Sources
- IRS — Rev. Proc. 2025-25 (2026 applicable percentages; the 400% cliff)
- HHS / ASPE — Federal Poverty Guidelines (2025, used for 2026 coverage)
- HealthCare.gov — Save on monthly premiums
- IRS — About Form 8962 (reconciliation and repayment)
See our methodology for how we turn these into numbers. Educational only — not tax advice; confirm specifics with a professional and on the Marketplace.