ACA Subsidy Cliff 2026: What Happens at 400% of Poverty
A job loss can put a household under the cliff — or a single extra shift can push it over. The difference is not a smaller credit. It is no credit.
The short answer
For 2026 coverage, premium tax credits end at 400% of the federal poverty level — $62,600 for one person and $128,600 for a family of four. The enhanced credits expired on 2025-12-31, and as of the last legislative check ( 2026-09-08) no extension had become law. One dollar over the line removes the whole credit.
Roughly your AGI plus tax-exempt interest and untaxed Social Security — projected for the coverage year, not last year's actual.
For a precise result, enter the second-lowest-cost Silver premium from your renewal notice or your marketplace's plan-compare tool.
401(k), traditional IRA, and HSA contributions lower your MAGI. Near the cliff, a few thousand dollars can be worth far more than the tax deduction itself. Not tax advice — confirm with a tax professional.
At 435% FPL you get no credit and would pay the full 683/month benchmark premium. Because repayment caps are gone for 2026, don't take advance credits you may not qualify for.
Move the pre-tax contributions slider: 5,400 into a 401(k), IRA, or HSA would put you exactly at the line and restore an estimated 1,961/year.
Blue dot: your income. The cliff is where the credit drops to zero.
Benchmark source: KFF 2026 Florida average (age 40), age-adjusted with the federal age curve. Tobacco surcharges and county-level pricing are not modeled.
For 2026, the income-based caps on repayment of excess advance credits were removed. If you underestimate your income, you repay the full difference at tax time — estimate carefully.
An offer of affordable, minimum-value employer coverage generally makes you ineligible for the credit. For 2026, 'affordable' means the employee share of self-only coverage costs no more than 9.96% of household income.
The 400% line, by household size
| Household size | 100% FPL | 400% 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 |
| 6 | $43,150 | $172,600 |
Uses the 2025 HHS guidelines, which govern 2026 premium tax credits. Premium tax credits for the 2026 coverage year are calculated on the 2025 HHS Poverty Guidelines (the guidelines in effect when 2026 open enrollment began). Alaska and Hawaii have separate tables.
Why one dollar matters
Below the line, the credit is the benchmark premium minus a required contribution that rises with income. At the line, the required contribution reaches 9.96% of income and the credit is calculated normally. One dollar above it, the credit is zero.
For a 40-year-old single adult on the national benchmark, that can be several thousand dollars a year. For an older couple, it can be the difference between an affordable plan and a premium that consumes a large share of income.
Legislative status
The ARP/IRA enhanced premium tax credits expired on December 31, 2025. The House passed a three-year extension on January 8, 2026 (230-196); the Senate has not passed it. A bipartisan Senate compromise is still being negotiated. Until a bill becomes law, the pre-2021 rules — including the 400% FPL cliff — govern the 2026 coverage year.
If Congress restores the enhanced credits, this page will be updated within 48 hours.
How a job loss changes the projection
The marketplace does not look only at last year's tax return. It uses your projected household income for the coverage year, and you are expected to update it when circumstances change. Three timing points matter:
Before you enroll
Use the income you actually expect this calendar year, not the salary on the job you lost. A partial year of wages can land well under 400%.
When the job ends
Report the change to the marketplace. The credit is recalculated from the new projected income, often lowering the monthly premium.
At tax filing
If actual income came in above the projection, the excess credit is repaid on the return. That reconciliation is why the cliff is a filing-year risk, not just an enrollment risk.
Compare it with COBRA before deciding
COBRA has no income test and no cliff — it is simply 102% of the full premium. The marketplace plan is usually cheaper above 200% FPL with a credit and more expensive below it. Run both numbers in the same sitting.
Common questions
What is the ACA subsidy cliff?＋
The cliff is the income line above which premium tax credits drop to zero instead of tapering off. For 2026 coverage it sits at 400% of the federal poverty level: $62,600 for a single person and $128,600 for a family of four under the 2025 guidelines that govern the 2026 tax year.
Did the enhanced subsidies expire?＋
Yes. The enhanced premium tax credits created during the pandemic expired on December 31, 2025. As of this page's last legislative check on 2026-09-08, no extension had become law, so the pre-2021 rules — including the 400% cliff — apply to 2026 coverage.
How much can crossing the cliff cost?＋
It can cost the entire annual credit. For a 60-year-old couple just under the line, that can be well over $20,000 in a year; for a young single adult it may be a few hundred dollars. The calculator above computes the amount from your own age, household and income.
Can I lower my MAGI to stay under 400%?＋
Sometimes. Pre-tax contributions to a 401(k), 403(b), traditional IRA or HSA reduce modified adjusted gross income. So can timing a Roth conversion into a later year or taking capital gains in a year you are already over the line. Do not reduce income you actually need just to preserve a credit — compare the tax saved with the income given up.
Does a job loss change the calculation?＋
Yes, and favorably in one direction: the marketplace uses your projected annual income for the coverage year, so a mid-year job loss can put you under the cliff even if earlier months pushed you over. Report the change to the marketplace promptly so the credit is recalculated.
What happens below 100% of poverty?＋
In an expansion state, Medicaid is the route and the marketplace credit is not available. In a non-expansion state there may be no subsidized path at all for adults below 100% FPL. Apply through HealthCare.gov and let the system route you.
Sources
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By Alyssa Xu, Founder & Editor.
Reviewed by Gavin YE, Technical Director, ClearRules Labs.
Page last reviewed 2026-09-08