ACA Subsidy Calculator

From 2021 through 2025, temporary enhanced premium tax credits removed the income cap on marketplace subsidies entirely and capped benchmark premiums at 8.5% of household income. Those enhancements expired on December 31 2025.

For the 2026 plan year the original Affordable Care Act structure returned, which changes two things:

• The 400% FPL cliff is back. Earn one dollar over the line and your credit drops to zero. This is a cliff, not a phase-out.
• Required contributions rose at every income band, topping out at a flat 9.96% of income from 300% to 400% of the poverty level.

That makes "how close am I to the cliff" the question this page is really built to answer — because near the threshold, a small change in income can be worth thousands of dollars, and the levers that change it are ordinary tax planning moves.

Legislation to restore the enhanced credits has been introduced but has not become law. These figures reflect current law as verified on August 16 2026 — confirm the current position before making a decision on the strength of it.

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The applicable percentage comes from IRS Revenue Procedure 2025-25 and slides with your income as a share of the federal poverty level:

Within a band the percentage is interpolated, which is how Form 8962 works. Worked example matching this calculator's defaults: a single filer with $45,000 of MAGI sits at 287.5% of the poverty level, giving an applicable percentage of 9.58%. That is a required contribution of $4,304 per year. Against a $700/month benchmark plan ($8,400/year), the credit is $4,088 — leaving $359 per month.

An important detail on the poverty guidelines: 2026 coverage is calculated from the 2025 HHS poverty guidelines. They always lag the plan year by one. For 48 states and DC that puts the cliff at $62,600 for a single person and $128,600 for a family of four.

The cliff is a genuine discontinuity. At 400.00% of FPL you receive a credit; at 400.01% you receive nothing. For an older household — where benchmark premiums are three times what a young adult pays — crossing it can cost well over $10,000 a year.

Because the test is modified adjusted gross income, the ordinary levers that reduce MAGI also restore eligibility:

• Pre-tax 401(k) or 403(b) contributions
• HSA contributions, if you are on a qualifying high-deductible plan, or FSA elections if your employer offers one instead — both are excluded from gross income under Section 125
• Deductible traditional IRA contributions
• For the self-employed, a SEP-IRA or solo 401(k) — and timing of invoices near year end

Near the threshold these are among the highest-return tax moves available to a household, because the benefit is not the marginal rate on the contribution — it is the entire premium tax credit.

One more trap: for the 2026 plan year, if you took the credit in advance and your final income lands above 400% of FPL, you repay the entire advance credit when you reconcile on Form 8962. The old repayment caps do not apply. If your income is uncertain and near the line, taking less in advance — or none, and claiming it at filing — removes that risk entirely.

1. Enter household MAGI for the full calendar year, for everyone on your tax return — including income you have already earned this year.
2. Set household size to everyone you claim on the return, including people who have other coverage.
3. Enter the benchmark Silver premium — the second-lowest-cost Silver plan available to your household in your county. Look it up on healthcare.gov. This varies enormously by age and county, and the default here is illustrative only.

Two things worth knowing about the result:

The credit is a fixed dollar amount. It is calculated against the benchmark Silver plan but you can apply it to any metal tier. Buy a cheaper Bronze plan and the credit does not shrink — your net cost falls further.

But check cost-sharing reductions before you do that. At or below 250% of FPL you also qualify for CSRs, which cut your deductible and copays substantially — and they are available only on Silver plans. Chasing the lower Bronze premium and forfeiting a heavily subsidised Silver plan is a common and expensive mistake.

Below 100% of FPL, eligibility depends on your state: in Medicaid expansion states adults up to 138% of FPL generally get Medicaid instead, and in non-expansion states households under 100% can fall into a coverage gap. Contact a marketplace navigator if that is your situation.