The ACA premium tax credit landscape changed significantly in 2026 when enhanced subsidies expired, and the 2027 outlook carries further uncertainty. If you are shopping for marketplace coverage or planning your income around subsidy eligibility, understanding where the income thresholds stand, and where they are likely headed in 2027, can save you thousands of dollars per year.
This guide covers the current 2026 income thresholds, the applicable contribution percentages, what projections currently show for 2027, and how to check whether you qualify before open enrollment begins.
What Changed When Enhanced Subsidies Expired
From 2021 through 2025, two federal laws, the American Rescue Plan Act and the Inflation Reduction Act, temporarily expanded premium tax credit eligibility. Anyone buying marketplace coverage could receive a subsidy regardless of how high their income was, as long as their net premium would otherwise exceed 8.5% of their household income.
Those enhancements expired on December 31, 2025. Starting with 2026 coverage:
- The 400% FPL income cap returned. Households earning above 400% of the federal poverty level no longer qualify for premium tax credits.
- Required contribution percentages reverted to the pre-2021 statutory levels, indexed for inflation. At higher income tiers, households now pay a larger share of the benchmark plan premium.
- Approximately 725,000 individuals and families who earned between 400% and 500% FPL lost eligibility entirely for 2026.
The Congressional Budget Office estimated that gross benchmark premiums increased by about 4.3% in 2026 as a direct result of this expiration. For 2027, CBO projects an additional 7.7% increase in benchmark premiums.
2026 ACA Income Eligibility Thresholds
ACA premium tax credits for 2026 coverage are calculated using the 2025 federal poverty guidelines. The 2025 FPL for the 48 contiguous states is $15,650 for a single person, increasing by approximately $5,500 for each additional household member.
The table below shows the 100% to 400% FPL range for common household sizes. Households must earn at least 100% FPL to qualify (unless they live in a state that has not expanded Medicaid, where a lower floor may apply).
2026 Coverage: ACA Subsidy Income Range by Household Size
| Household Size | 100% FPL | 150% FPL | 200% FPL | 250% FPL | 300% FPL | 400% FPL |
|---|
| 1 person | $15,650 | $23,475 | $31,300 | $39,125 | $46,950 | $62,600 |
| 2 people | $21,150 | $31,725 | $42,300 | $52,875 | $63,450 | $84,600 |
| 3 people | $26,650 | $39,975 | $53,300 | $66,625 | $79,950 | $106,600 |
| 4 people | $32,150 | $48,225 | $64,300 | $80,375 | $96,450 | $128,600 |
| 5 people | $37,650 | $56,475 | $75,300 | $94,125 | $112,950 | $150,600 |
| 6 people | $43,150 | $64,725 | $86,300 | $107,875 | $129,450 | $172,600 |
Households earning above the 400% FPL figures in the rightmost column receive no premium tax credit under current 2026 rules.
2026 Applicable Contribution Percentages
The size of your premium tax credit depends on how much you are required to contribute toward the benchmark plan. The IRS sets these contribution percentages annually via revenue procedure. For 2026, the applicable percentages under IRS Revenue Procedure 2025-25 are:
| Household Income (% of FPL) | Required Contribution (Initial) | Required Contribution (Final) |
|---|
| Less than 133% | 2.10% | 2.10% |
| 133% to less than 150% | 3.14% | 4.19% |
| 150% to less than 200% | 4.19% | 6.60% |
| 200% to less than 250% | 6.60% | 8.44% |
| 250% to less than 300% | 8.44% | 9.96% |
| 300% to 400% | 9.96% | 9.96% |
The required contribution percentage for employer-sponsored coverage affordability in 2026 is also 9.96%.
These percentages are the highest they have ever been under the ACA. In 2025, the enhanced subsidy structure held contribution percentages lower across all income tiers. The return to standard percentages means most enrollees with incomes above 150% FPL are paying a larger share out of pocket than they did in 2025.
2027 Threshold Projections
The 2027 federal poverty guidelines have not yet been released. HHS typically publishes updated guidelines in January each year, and the figures used for 2027 ACA coverage will be based on those new guidelines.
Based on historical inflation patterns, the 2027 FPL for a single person in the contiguous states is projected to be roughly $16,200 to $16,700, with family-size increments adjusting proportionally. These are estimates. The official 2027 numbers will come from HHS.
What this means for 2027 thresholds:
- The 400% FPL cap for a single person is projected to fall in the range of $64,800 to $66,800.
- A family of four at 400% FPL would be looking at roughly $132,000 to $136,000 as the subsidy cutoff.
Projected 2027 ACA Subsidy Cutoffs (Estimated)
| Household Size | Estimated 100% FPL | Estimated 400% FPL |
|---|
| 1 person | approximately $16,200 to $16,700 | approximately $64,800 to $66,800 |
| 2 people | approximately $21,900 to $22,600 | approximately $87,600 to $90,400 |
| 4 people | approximately $33,200 to $34,300 | approximately $132,800 to $137,200 |
These are projections based on inflation trends, not official government figures. Bookmark this page for updates when HHS releases 2027 guidelines.
Contribution Percentages for 2027
IRS typically releases the indexed applicable percentages for the next coverage year in mid-summer. As of the date this article was written (May 2026), the 2027 percentages had not been officially published. However:
- The contribution percentages are indexed to the rate of growth in health insurance premiums relative to income growth.
- Given the CBO projection of a 7.7% increase in benchmark premiums for 2027, it is possible that the 9.96% cap on required contributions could adjust modestly upward, potentially making the subsidy cliff slightly higher or lower depending on income growth trends.
- Congress could act to extend or restore enhanced subsidies. Multiple legislative proposals have been introduced, though none had passed as of May 2026.
The 400% FPL Cliff and What It Means in Practice
The "subsidy cliff" describes the sharp cutoff in premium tax credits at 400% FPL. Below that threshold, your tax credit gradually decreases as income rises. Above it, the credit drops to zero immediately.
For a 60-year-old in a moderate-cost county, crossing the 400% FPL line could mean going from paying around $150 to $300 per month for benchmark coverage to paying $800 to $1,200 per month, an increase of $7,000 to $12,000 per year. KFF research has found this cliff is particularly steep for older middle-income enrollees, who face higher premiums due to age rating.
Planning strategies some households use near the 400% FPL boundary include:
- Maximizing traditional IRA or 401(k) contributions to reduce modified adjusted gross income (MAGI) below the subsidy cutoff.
- Timing capital gains realizations to avoid pushing MAGI above 400% FPL.
- For self-employed individuals, deducting health insurance premiums and self-employment taxes from MAGI.
- Charitable deductions do not reduce MAGI for ACA purposes, so they are not a useful lever here.
These strategies are complex and income-specific. Consulting a tax professional before open enrollment is advisable if you are near the cliff.
Cost-Sharing Reductions: The 250% FPL Threshold
Separate from premium tax credits, cost-sharing reductions (CSRs) provide additional financial help by lowering deductibles, copays, and out-of-pocket maximums on silver-tier marketplace plans. CSRs are available only to households earning between 100% and 250% FPL who enroll in a silver plan.
For 2026 coverage, the 250% FPL CSR cutoff is:
| Household Size | 250% FPL (CSR Cutoff) |
|---|
| 1 person | $39,125 |
| 2 people | $52,875 |
| 3 people | $66,625 |
| 4 people | $80,375 |
CSRs are funded separately from premium tax credits and were not part of the enhanced subsidy provisions that expired. They remain available under current law for 2026 and are expected to continue for 2027.
Medicaid vs. ACA Marketplace: Where the Line Falls
Below 100% FPL in states that have expanded Medicaid, most adults qualify for Medicaid rather than marketplace subsidies. In the 40-plus states (including Washington, D.C.) that have expanded Medicaid under the ACA, the income floor for marketplace eligibility is effectively 100% FPL.
In the remaining non-expansion states, adults without dependent children often fall into a coverage gap: they earn too much for legacy Medicaid but too little for marketplace subsidies. The 100% FPL floor for premium tax credits still applies, leaving this population without affordable options in those states.
For 2026, 138% FPL, the Medicaid expansion eligibility threshold, equals:
- $21,597 for a single individual
- $44,367 for a family of four
How to Check Your Eligibility Now
The fastest way to see whether your household qualifies for a premium tax credit under current rules is to use a benefits screener. Our tool checks ACA eligibility alongside 10 other federal and state programs in a few minutes.
Use the free benefits screener at BenefitsUSA to get a quick estimate based on your income, household size, and state.
For 2027 open enrollment, keep these dates in mind. The marketplace open enrollment window for 2027 coverage typically opens in November 2026. Changes to 2027 FPL guidelines and IRS contribution percentages will be published before that window opens, so checking for updates in September and October 2026 will give you the most accurate numbers.
Frequently Asked Questions
What is the income limit for the ACA premium tax credit in 2027?
The 2027 income limits have not been officially released as of mid-2026. Based on 2025 FPL figures (used for 2026 coverage), 400% FPL for a single person is $62,600 and $128,600 for a family of four. The 2027 thresholds are expected to be roughly 3% to 5% higher once updated HHS guidelines are published in early 2027.
Did the enhanced ACA subsidies get extended for 2026 or 2027?
No. The enhanced premium tax credits created by the American Rescue Plan (2021) and extended by the Inflation Reduction Act (2022) expired on December 31, 2025. As of May 2026, Congress had not passed legislation to restore them. Enrollees who benefited from enhanced subsidies saw higher premiums or lost eligibility starting with 2026 coverage.
What happens to my premium tax credit above 400% FPL in 2026?
Under current law, households earning above 400% of the federal poverty level receive no premium tax credit for 2026 coverage. This is a return to the pre-2021 rules. The subsidy ends abruptly at the 400% threshold, which is known as the "subsidy cliff."
How much will premiums increase in 2027 compared to 2026?
The Congressional Budget Office projected that benchmark premiums would increase by approximately 7.7% in 2027, partly due to continued enrollment shifts following the expiration of enhanced subsidies. Actual premiums vary by insurer, plan, age, and location.
What income level qualifies for cost-sharing reductions in 2026 and 2027?
Cost-sharing reductions require income between 100% and 250% of the federal poverty level and enrollment in a silver-tier marketplace plan. For 2026 coverage, the 250% FPL threshold is $39,125 for a single person and $80,375 for a family of four. Similar thresholds are expected for 2027 once updated FPL guidelines are published.
Will Congress restore enhanced ACA subsidies before 2027 open enrollment?
As of May 2026, no legislation had passed to restore enhanced subsidies. Several proposals have been introduced in Congress, but the outcome is uncertain. The safest planning approach is to assume standard (non-enhanced) subsidy rules apply for 2027 until legislation is signed into law.
How do I calculate my premium tax credit amount?
Your premium tax credit equals the cost of the benchmark silver plan in your area minus your required contribution. Your required contribution is a percentage of your household income (ranging from 2.10% to 9.96% for 2026 depending on your FPL percentage). The difference is your subsidy. If the benchmark plan costs less than your required contribution, you receive no credit.
Does investment income count toward ACA income limits?
Yes. The ACA uses modified adjusted gross income (MAGI), which includes wages, self-employment income, Social Security benefits (in most cases), capital gains, rental income, interest, and dividends. It does not include gifts, inheritances, or child support received.
