What is the Premium Tax Credit?
The ACA Premium Tax Credit reduces your monthly health insurance premium. It is based on your income relative to the Federal Poverty Level and the cost of plans in your area. The credit is paid directly to your insurance company each month, lowering your monthly bill automatically. You can also choose to receive it as a lump sum when you file your taxes instead. Either way the savings are the same — it is simply a matter of when you receive the benefit. Most people choose the monthly option to reduce their immediate out of pocket costs.
2026 Income Limits by Household Size
The following table shows the Federal Poverty Level thresholds for 2026. Your income relative to these figures determines your subsidy eligibility.
| Household Size | 100% FPL | 150% FPL | 200% FPL | 250% FPL | 300% FPL | 400% FPL |
|---|---|---|---|---|---|---|
| 1 person | $15,650 | $23,475 | $31,300 | $39,125 | $46,950 | $62,600 |
| 2 people | $21,150 | $31,725 | $42,300 | $52,875 | $63,450 | $84,600 |
| 3 people | $26,650 | $39,975 | $53,300 | $66,625 | $79,950 | $106,600 |
| 4 people | $32,150 | $48,225 | $64,300 | $80,375 | $96,450 | $128,600 |
| 5 people | $37,650 | $56,475 | $75,300 | $94,125 | $112,950 | $150,600 |
| 6 people | $43,150 | $64,725 | $86,300 | $107,875 | $129,450 | $172,600 |
| 7 people | $48,650 | $72,975 | $97,300 | $121,625 | $145,950 | $194,600 |
| 8 people | $54,150 | $81,225 | $108,300 | $135,375 | $162,450 | $216,600 |
Incomes between 100% and 400% FPL — and above 400% FPL under extended subsidy rules — may qualify for Premium Tax Credits. Income below 138% FPL may qualify for Medicaid in expansion states.
How is the Subsidy Amount Calculated?
The government caps what you pay as a percentage of your income based on where your income falls relative to the Federal Poverty Level. Your monthly subsidy equals the benchmark Silver plan premium in your area minus your maximum required monthly contribution. The table below shows the contribution caps at each income level. The lower your income relative to the FPL, the smaller your required contribution — and the larger your potential subsidy credit.
| Income Level | Your Maximum Contribution |
|---|---|
| Under 150% FPL | 0% of income |
| 150–200% FPL | 0% to 2% of income |
| 200–250% FPL | 2% to 4% of income |
| 250–300% FPL | 4% to 6% of income |
| 300–400% FPL | 6% to 8.5% of income |
| Over 400% FPL | 8.5% cap (extended subsidy rules) |
What are Cost-Sharing Reductions?
Cost-Sharing Reductions are available only on Silver plans for households earning 100–250% of the Federal Poverty Level. They reduce your deductibles, copays, and out-of-pocket maximums significantly — in some cases effectively upgrading a Silver plan to Gold or Platinum level coverage at no additional premium cost. This is only available if you enroll in a Silver plan. You cannot receive Cost-Sharing Reductions on Bronze or Gold plans even if your income qualifies. For lower income households this can be the most valuable benefit available in the marketplace.
Medicaid vs Marketplace Coverage
If your income is below approximately 138% of the Federal Poverty Level and you live in a Medicaid expansion state you likely qualify for Medicaid which typically has $0 or very low premiums. The following states have NOT expanded Medicaid as of 2026: Texas, Florida, Georgia, Alabama, Mississippi, South Carolina, Tennessee, Wisconsin, Wyoming, Kansas. If you live in a non-expansion state with income below 100% FPL you may fall into a coverage gap — contact your state health department or a local navigator for options.
How to Apply for Subsidies
Apply through Healthcare.gov during open enrollment which runs November 1 through January 15 each year. You can also apply year-round if you have a qualifying life event such as job loss, marriage, divorce, birth of a child, or loss of other coverage. Subsidies are not automatic — you must apply and provide income documentation. A certified navigator can help you apply for free. Find one at localhelp.healthcare.gov. When you apply you will need your estimated annual household income, Social Security numbers for household members, and information about any employer coverage available to you.