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The subsidy cliff is back. One dollar over 400% FPL, and the whole credit is gone.
The enhanced ACA subsidies expired December 31, 2025 — and with them went two things: the 8.5%-of-income cap and the removal of the income ceiling. For 2026 coverage, the original rules are back: applicable percentages run 2.10%–9.96% (Rev. Proc. 2025-25), and above 400% of the federal poverty line the credit is zero — not reduced, zero. For a 60-year-old with a $12,720 benchmark plan, that single dollar of income is a $6,500 swing. This calculator runs the exact Form 8962 methodology with linear interpolation inside each band, all three FPL regions, and shows your cliff headroom in dollars.
Freelancers, early retirees, and anyone buying marketplace coverage use it to price the returned 400% cliff — the enhanced subsidies expired for 2026, so one dollar of MAGI over the line zeroes a credit that can run $6,000–$13,000 a year, and the pre-tax moves that pull income back under pay for themselves twice.
Credit = benchmark silver premium − (your MAGI × applicable percentage). The percentage comes from a six-band table interpolated linearly: 2.10% under 133% FPL, rising to 9.96% at 300–400% FPL. Example: single filer at $62,000 (396% FPL) with a $12,720 benchmark pays $6,175 (9.96%) and the credit covers the remaining $6,545/yr — about $545/month.
Yes. From 2021–2025 the ARPA/IRA enhancements removed the 400% ceiling and capped contributions at 8.5%. Those expired 12/31/2025 and were not extended (a House extension passed January 2026 but stalled in the Senate). For 2026: at 400.01% FPL the credit is $0. Also new for 2026 under OBBBA: excess advance-credit repayment caps are removed, so an income underestimate is repaid in full at tax time. Legislation could still change 2026 retroactively — verify before filing.
MAGI management. Pre-tax 401(k)/403(b), SEP-IRA, HSA contributions and the self-employed health-insurance deduction all reduce MAGI dollar-for-dollar. A freelancer $5,000 over the line who routes $6,000 into a SEP-IRA restores a credit that can be worth $6,000–$13,000+ depending on age and county — on top of the deduction itself. Run the number before December: the credit is reconciled on the full year's MAGI via Form 8962.