Updated August 3, 2026. Quick answer: the subsidy cliff returned on 1 January 2026. From 2021 through 2025 a temporary rule removed the 400%-of-poverty ceiling, so subsidies tapered smoothly at any income. That rule was written with an end date and it reached it. Above 400% in 2026, the premium tax credit is zero.
What the statute actually says
Two provisions do all the work. 26 U.S.C. 36B(c)(1)(A) defines who can claim the credit: a taxpayer whose household income “equals or exceeds 100 percent but does not exceed 400 percent” of the poverty line.
Then 36B(c)(1)(E), headed “Temporary rule for 2021 through 2025”, says that for a taxable year “beginning after December 31, 2020, and before January 1, 2026”, subparagraph (A) is applied “without regard to ‘but does not exceed 400 percent’”.
Read together: the no-cliff rule was bounded to 2021–2025 in its own text. It did not need repealing. It expired on schedule, and the 400% ceiling resumed.
The percentage table changed too
36B(b)(3)(A)(iii) sunset the enhanced applicable percentage schedule on the same date, so 2026 uses the regular indexed table — running from 2.10% up to 9.96% (Rev. Proc. 2025-25). Under the enhanced rules the bottom tier paid 0%. It does not now.
How we know no extension has taken effect
This is the part worth being precise about, because it is the kind of thing that changes. The IRS computed the 2026 applicable percentage table under the regular, non-enhanced statutory formula in Rev. Proc. 2025-25, and did the same for the 2027 table in Rev. Proc. 2026-26, issued in July 2026. The agency could not have published either on that basis had an extension been enacted.
The honest limit on that: it is strong primary evidence, but it is indirect — it is the IRS acting consistently with expiry rather than a legislative record. Proposals to restore the enhanced credits have been introduced. This page is dated, and if Congress acts it changes. Treat the date at the top as the verification date, not as decoration.
What it means in practice
- The cliff is a wall, not a slope. One dollar over 400% costs the entire credit.
- It hits early retirees hardest, because they often have real control over MAGI and a benchmark premium large enough that the credit is worth thousands.
- Older enrollees lose most. Premiums rise with age, so the same percentage cap shields a 62-year-old far more than a 30-year-old — and losing it hurts correspondingly more.
- Most content ranking for this is stale. Five years of articles were written while the cliff did not exist.
Work out your own position: the 2026 subsidy calculator. What moves MAGI: managing MAGI for ACA subsidies. Which MAGI: IRMAA MAGI is not ACA MAGI.
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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.