ACA subsidy cliff calculator
Retire before 65 and your health cover price depends on the income you choose to show. Here's your 2026 credit, where it ends, and how much room you have before it does.
Showing $50,000 (319% of the poverty line), your yearly premium tax credit is
$10,934
The credit stops above $62,600. You have $12,600 of income headroom below the cliff; one dollar past it loses $9,679 of credit.
- You are expected to pay
- $4,980
- 9.96% of income, toward the benchmark plan.
- Benchmark plan after the credit
- $4,980
- About $415 a month, from $15,914.
- Poverty line for 1
- $15,650
- The 2025 guideline, which sets 2026 credits.
| Poverty line | Income | Share | Credit |
|---|---|---|---|
| 100% | $15,650 | 2.10% | $15,585 |
| 133% | $20,815 | 3.14% | $15,260 |
| 150% | $23,475 | 4.19% | $14,930 |
| 200% | $31,300 | 6.60% | $13,848 |
| 250% | $39,125 | 8.44% | $12,612 |
| 300% | $46,950 | 9.96% | $11,238 |
| 400% | $62,600 | 9.96% | $9,679 |
| Over 400% | $62,601 | — | $0 |
2026 cover, federal rules, lower 48 states and DC. Alaska and Hawaii use higher poverty lines and are not modelled. Medicaid, state subsidies and married filing separately (no credit) are not modelled, and the premium is yours to enter: it depends on each person's age and your area. Nothing is stored and nothing is sent to us — the address bar carries your figures so you can save or share them.
In early retirement, income is a choice
A salary sets your income for you. Living off savings, you decide each year how much of it is taxable: spending cash or your own Roth contributions adds nothing, while a traditional IRA withdrawal or a Roth conversion adds every dollar. That makes the credit something you plan, not something that happens to you.
It also means the cheapest year for a big Roth conversion may not be the one with the lowest tax bracket. A conversion that carries income over the cliff can cost more in lost credit than in tax, so size conversions against the headroom figure above as well as the brackets.
Where the cliff sits for 2026 cover
The line is 400% of the poverty guideline for your household size, in the lower 48 states and DC:
- 1 person$62,600
- 2 people$84,600
- 3 people$106,600
- 4 people$128,600
Below the line, the share of income you are expected to pay rises with income, from 2.10% near the poverty line to 9.96% from 300% upward. The credit is the benchmark premium minus that share, so it shrinks gradually as income rises, then drops to nothing at the line. The older you are, the higher the premium and the bigger the drop.
Questions people ask
- What is the ACA subsidy cliff?
- The premium tax credit stops at 400% of the federal poverty line. From 2021 to 2025 a temporary rule let households above that line keep a credit; it ended on 31 December 2025, so for 2026 cover the line is a hard edge again. One dollar over it and the credit is zero, whatever the premium.
- What income counts?
- Modified adjusted gross income: your adjusted gross income plus tax-exempt interest, the part of Social Security that is not taxed, and excluded foreign income. Traditional IRA and 401(k) withdrawals, Roth conversions, capital gains, dividends and wages all count. Spending cash, selling at no gain, or taking your own Roth contributions back out does not add income.
- Why does the calculator use the 2025 poverty line for 2026?
- The credit uses the poverty guidelines in effect on the first day of open enrollment for the coverage year. Open enrollment for 2026 cover began on 1 November 2025, so the 2025 guidelines apply. The 2026 guidelines set credits for 2027 cover.
- What if my income turns out different from my estimate?
- The credit paid in advance during the year is based on your estimate, then settled on your tax return. If your final income is higher, you may owe some back; if it lands over the 400% line, the advance credit has to be repaid. Leaving headroom below the line is cheaper than missing it.
- What happens at very low income?
- Below 100% of the poverty line there is no credit. In states that expanded Medicaid, adults with income up to about 138% of the poverty line usually qualify for Medicaid instead. In states that did not expand it, income under 100% falls in the coverage gap. This calculator does not check your state.
- Which premium should I enter?
- The yearly price of the second-lowest-cost silver plan in your area, for everyone on your plan. The marketplace shows it when you browse plans. That plan sets the size of the credit, which you can then use on any marketplace plan: a cheaper plan costs you less, a dearer one more, and the credit never exceeds the price of the plan you buy.
For what health cover adds to the portfolio you need, see health insurance in early retirement. For converting at low tax, see the Roth conversion ladder calculator.
Sources: Internal Revenue Code §36B (premium tax credit; §36B(b)(3) applicable percentage and benchmark plan, §36B(c)(1) the 100% and 400% limits, §36B(d)(2)(B) modified adjusted gross income, §36B(f) reconciliation); 45 CFR 147.102 (age rating); 26 CFR 1.36B-1(h) and 1.36B-3(g); IRS Rev. Proc. 2025-25 §3.01 (2026 applicable percentage table); HHS 2025 Poverty Guidelines, 90 FR 5917; HealthCare.gov (Medicaid expansion income limit); KFF (2026 benchmark silver premium for a 60-year-old, the default premium).