Updated November 8, 2026. Quick answer: For 2027 the ACA premium tax credit still ends above 400% of the federal poverty line. The statute defines the eligible taxpayer as one whose household income does not exceed 400 percent of the poverty line, and the temporary rule that lifted that limit ran only through 2025. Using the 2026 HHS poverty guidelines, the ones in force at the start of enrollment for 2027 coverage under 26 CFR 1.36B-1(h), the 400% line is $63,840 (computed) for one person, $86,560 (computed) for two and $132,000 (computed) for four in the 48 states and DC. Right at the line the 2027 applicable percentage is 10.22% (Rev. Proc. 2026-26); one dollar over it the credit is zero.
What the statute says about the 400% limit
The eligibility definition: “whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved”.
The years when that ceiling did not apply were set by a temporary rule in the same section: for taxable years beginning after December 31, 2020, and before January 1, 2026, the eligibility test is applied without the 400 percent limit. The statute text we archived on November 8, 2026 carries that rule only through 2025, and Rev. Proc. 2026-26 publishes a 2027 table that stops at 400%. The IRS instructions for a return above the line say “The amount on line 1 above is more than 400% of the federal poverty line. Enter 401 here and on line 5 of Form 8962.”
The 400% line in dollars
Which poverty guideline applies? The regulation says the Federal poverty line is “the most recently published poverty guidelines (updated periodically in the Federal Register by the Secretary of Health and Human Services under the authority of 42 U.S.C. 9902(2)) as of the first day of the regular enrollment period for coverage by a qualified health plan offered through an Exchange for a calendar year”. For 2025 returns that meant the 2024 guidelines: “For 2025, the 2024 federal poverty lines are used for this purpose and are shown below.” The HHS page we archived on November 8, 2026 lists the 2026 guidelines as the current ones, so they are the guidelines that apply to 2027 coverage. The figures:
| Household size | 48 states and DC, 2026 guideline (100%) | 400% line, 48 states and DC | 400% line, Alaska | 400% line, Hawaii |
|---|---|---|---|---|
| 1 | $15,960 | $63,840 (computed) | $79,800 (computed) | $73,440 (computed) |
| 2 | $21,640 | $86,560 (computed) | $108,200 (computed) | $99,560 (computed) |
| 3 | $27,320 | $109,280 (computed) | $136,600 (computed) | $125,680 (computed) |
| 4 | $33,000 | $132,000 (computed) | $165,000 (computed) | $151,800 (computed) |
| 5 | $38,680 | $154,720 (computed) | $193,400 (computed) | $177,920 (computed) |
| 6 | $44,360 | $177,440 (computed) | $221,800 (computed) | $204,040 (computed) |
| 7 | $50,040 | $200,160 (computed) | $250,200 (computed) | $230,160 (computed) |
| 8 | $55,720 | $222,880 (computed) | $278,600 (computed) | $256,280 (computed) |
Each 400% figure is four times the guideline for that size and region. For more than 8 people HHS says “For families/households with more than 8 persons, add $5,680 for each additional person.” in the 48 states and DC, which makes each added person add $22,720 (computed) to the 400% line.
What crossing the line costs, in a worked example
An illustration with one person in the 48 states, using a benchmark (second lowest cost silver) premium we assumed at $800 a month, or $9,600 a year. The statute sets the expected contribution as “an amount equal to 1/12 of the product of the applicable percentage and the taxpayer’s household income for the taxable year”. The yearly credit in the table is the assumed benchmark premium minus the yearly expected contribution, 10.22% x household income.
| Household income | Applicable percentage | Expected contribution (computed) | Premium tax credit (computed) |
|---|---|---|---|
| $63,840 | 10.22% | $6,524.45 (computed) | $3,075.55 (computed) |
| $63,841 | No credit above 400% | Not applicable | $0 |
The premium and the one-dollar step are assumptions chosen to show the shape. Your benchmark premium depends on your county and age.
The 2027 applicable percentage table
Rev. Proc. 2026-26 publishes the table for taxable years beginning in 2027. It is the same table the ACA applicable percentage page walks through:
| Household income as a percentage of the federal poverty line | Initial percentage | Final percentage |
|---|---|---|
| Less than 133% | 2.15% | 2.15% |
| At least 133% but less than 150% | 3.23% | 4.3% |
| At least 150% but less than 200% | 4.3% | 6.78% |
| At least 200% but less than 250% | 6.78% | 8.66% |
| At least 250% but less than 300% | 8.66% | 10.22% |
| At least 300% but not more than 400% | 10.22% | 10.22% |
Common mistakes
- Treating the line as taxable income. The test uses household income as Form 8962 defines it, which starts from modified adjusted gross income.
- Using the wrong year’s guideline. The credit uses the guidelines in force when enrollment opens for the coverage year (the 2024 guidelines for 2025 returns); a newer HHS table would move every dollar figure here.
- Assuming a small excess costs a small amount. Above 400% the credit is not allowed at all, and Form 8962 line 5 uses 401 for that case.
Related: the 2027 ACA applicable percentage table, the 2026 federal poverty level, the 2026 ACA subsidy cliff, and managing MAGI for ACA subsidies.
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Answer againSources
- 26 U.S.C. 36B (Cornell LII): law.cornell.edu page
- Rev. Proc. 2026-26, 2027 applicable percentage table (section 36B): irs.gov PDF
- HHS ASPE, 2026 Poverty Guidelines: aspe.hhs.gov page
- Instructions for Form 8962 (2025 edition): irs.gov PDF
- 26 CFR 1.36B-1(h) (eCFR, as of 2026-11-01): ecfr.gov page
Read from the documents linked above on November 8, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan or account provider or the agency itself is the right place to confirm anything consequential.