Updated August 3, 2026. Quick answer: for 2026 the ACA subsidy cliff is back. Above 400% of the poverty line the premium tax credit does not taper — it stops. The enhanced rules that removed the cliff were written to expire at the end of 2025 and they did. Most of what ranks for this question was written while the cliff did not exist.
What this actually computes
Two things, and it is honest about the difference. First, where your income sits against the poverty line — which decides whether you are under or over the cliff. Second, the applicable percentage the law says you are expected to contribute toward the benchmark plan, and therefore what that contribution is in dollars. The credit itself is the benchmark premium minus that contribution, so if you enter your area’s benchmark premium you get the credit too.
The 2026 percentages, from the revenue procedure
These are the indexed figures for 2026, not the statutory base and not the 2021-2025 enhanced schedule (Rev. Proc. 2025-25):
| Household income (% of poverty line) | Initial % | Final % |
|---|---|---|
| Less than 133% | 2.10% | 2.10% |
| At least 133% but less than 150% | 3.14% | 4.19% |
| At least 150% but less than 200% | 4.19% | 6.60% |
| At least 200% but less than 250% | 6.60% | 8.44% |
| At least 250% but less than 300% | 8.44% | 9.96% |
| At least 300% but not more than 400% | 9.96% | 9.96% |
The poverty line this is measured against
Marketplace eligibility for a coverage year uses the prior year’s poverty guidelines, so 2026 coverage is measured against the 2025 schedule (90 FR 5917). Alaska and Hawaii have their own higher schedules, which the calculator applies:
| Household size | 48 states + DC | 400% of it |
|---|---|---|
| 1 | $15,650 | $62,600 |
| 2 | $21,150 | $84,600 |
| 3 | $26,650 | $106,600 |
| 4 | $32,150 | $128,600 |
| each additional | +$5,500 | +$22,000 |
Why the cliff is worth more attention than the percentages
Below the line the subsidy tapers gently — a dollar of extra income costs you a few cents of credit. At the line it falls off completely. A household one dollar over 400% gets nothing, while one dollar under gets the full calculation. For an early retiree with discretionary control over MAGI — which withdrawals, whether to convert, when to realise gains — that makes the 400% figure one of the highest-value numbers in the whole plan. What actually moves MAGI.
The corrective detail on what changed and when: the 2026 subsidy cliff, explained. Bridging from work: COBRA vs the marketplace at retirement.
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Percentages are from IRS Rev. Proc. 2025-25 (the 2026 applicable percentage table); poverty guidelines from 90 FR 5917, which is the schedule used for 2026 coverage; statutory rules from 26 U.S.C. 36B and 29 U.S.C. 1162 and 1165, all read at source on August 3, 2026. This is an estimate of the benchmark calculation, not a quote, and it is not tax advice. If Congress restores the enhanced credits this page changes — check the date above.