ACA Premium Tax Credit Thresholds (2026)
Income thresholds for ACA Marketplace premium tax credits — the key calculation for laid-off workers weighing COBRA against a Marketplace plan.
Current value (2026)
9.96%
Primary source
Historical values
| Year | Value |
|---|---|
| 2026 | 9.96% |
What this means if you were laid off
The ACA premium tax credit reduces your monthly cost for a Marketplace health plan. The credit is calculated using a bracketed table that defines the maximum share of household income you are expected to pay for the benchmark Silver plan before the credit covers the rest. For 2026, the maximum applicable percentage reaches 9.96% at the 250-400% FPL income bracket, per IRS Rev. Proc. 2025-25.
This is a material change from 2025. The American Rescue Plan and Inflation Reduction Act set a flat 8.5% cap on the applicable percentage for all households, eliminating any income cliff at 400% FPL. That provision expired after plan year 2025. For 2026, the original IRC Section 36B bracketed table applies again. Households above 400% FPL receive no premium tax credit, and the maximum percentage at the upper brackets is 9.96%.
For a laid-off worker, the brackets closer to the bottom of the FPL scale matter more. At 100-133% FPL, the applicable percentage is 0%, meaning you pay nothing for the benchmark Silver plan before the credit applies. At 133-150% FPL, the percentage steps up slightly. The credit compensates for the gap between your expected contribution and the actual Silver benchmark plan premium.
A layoff that reduces your annual income creates a real opportunity. Project your full-year income (wages before layoff plus severance) to estimate where you land on the FPL scale, then compare a Marketplace plan against COBRA. In many cases, especially for households below 250% FPL, the Marketplace plan with the advance premium tax credit is considerably cheaper than COBRA.
Frequently asked questions
- What is the maximum applicable percentage for ACA subsidies in 2026?
- 9.96% for households at the 250-400% FPL income bracket, per IRS Rev. Proc. 2025-25. Lower income brackets have lower percentages, resulting in larger credits.
- Did the ACA subsidy rules change for 2026?
- Yes. The 8.5% flat cap from the American Rescue Plan and Inflation Reduction Act expired after plan year 2025. For 2026, the original IRC Section 36B bracketed table applies. Households above 400% FPL are no longer eligible for premium tax credits.
- How does the credit work if my income changes during the year?
- You estimate your projected annual income when you enroll and apply for advance premium tax credits. At tax filing, you reconcile your estimate against actual income. If you underestimated income, you repay some or all of the advance credit. If you overestimated, you receive the difference as a refund.
- If my layoff puts me below 400% FPL, can I qualify mid-year?
- Yes. Losing employer-sponsored coverage is a qualifying life event that triggers a 60-day special enrollment period. You can apply for a Marketplace plan and advance credits immediately after coverage ends.
- Does the subsidy apply to any Marketplace plan or only specific ones?
- The premium tax credit is calculated based on the benchmark Silver plan premium in your area. You can apply the credit to any plan tier (Bronze, Gold, etc.), but the credit amount is fixed to the Silver benchmark. Choosing a cheaper Bronze plan can result in a lower net premium.
Estimate your insurance costs after the layoff
Enter your income and household size to see how your ACA subsidy eligibility may change.
Calculate your severanceLast verified: 2026-05-04. Not legal, financial, or tax advice. Methodology.