Deorbit Plan

ACA subsidy cliff calculator (2026)

Your premium tax credit, your expected contribution, and what one dollar over 400% of the poverty line costs

By the Deorbit Plan editorial team, a Berrydyne program · Last reviewed · Topic: ACA & early retirement

What it computes

The premium tax credit pays the difference between the benchmark silver plan and an expected contribution: a percentage of your household income that rises with income as a share of the poverty line[2]. For 2026 the credit is available only from 100%to 400% of the poverty line[1], so one dollar of MAGI (the income figure the marketplace uses) above 400% removes it entirely. This calculator uses the poverty guideline for your household size[7], the applicable-percentage table and the same credit function the simulator runs, then shows how much room you have before the cliff, or how far over it you are.

ACA premium tax credit and the 400% cliff

At 378% of the poverty line you are expected to pay 9.96% of MAGI ($7,968) toward the benchmark plan, so the credit is $12,032 a year. You have $4,600 of room before the 400% line; one dollar past it would cost the whole $11,574 credit.

  • Poverty line (household of 2): $21,150. Your MAGI is 378% of it; credits run from $21,150 (100%) to $84,600 (400%).
  • Applicable percentage: 9.96%. Expected contribution $7,968 a year ($664 a month).
  • Premium tax credit: $12,032 a year; the benchmark plan then costs $7,968.
  • Cost of crossing 400%: $11,574, the credit at exactly $84,600 of MAGI, lost entirely one dollar above it.

Uses the poverty guideline the coverage year’s credits are based on (the prior year’s, 48 contiguous states) and the applicable-percentage table the simulator uses. Alaska and Hawaii have higher poverty lines.

Worked example

A married couple, household of 2, expects $80,000 of MAGI and is quoted $20,000 a year for the benchmark silver plan. That MAGI is 378% of the $21,150 poverty line, so their expected contribution is 9.96% of MAGI, $7,968, and the credit is $12,032.

They have $4,600 of room. A Roth conversion or capital gain that took MAGI to $84,601 or more would leave a credit of $0: the last dollar would cost $11,574 in lost credit.

What it ignores

  • Medicaid: in states that expanded Medicaid, most adults with income up to 138% of the poverty line qualify for Medicaid rather than a credit. In states that did not, adults below 100% of the poverty line can fall into a gap and get neither.
  • Reconciling advance credit payments at tax time, including any repayment of credit paid in advance.
  • Alaska and Hawaii poverty lines, and the narrow exceptions for married people filing separately.
  • Employer coverage offers that make a household ineligible, and plans priced above or below the benchmark (the credit is the same; the net premium differs).
  • Any future change by Congress to the 400% limit or the applicable percentages.

The rule behind it

The full explanation, with sources, is in The ACA subsidy cliff after 2025.

See it over a full plan

Early retirees control MAGI year by year. The simulator models marketplace premiums and credits for every pre-65 year of a plan, alongside the withdrawals and conversions that set MAGI. Open it in the simulator →

If you already have a saved plan, the link only takes you to the right panel; your plan is not changed.

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This tool shows how the rules work. It is not financial, tax or investment advice. See the disclaimer.

Sources