How to stay under 400% of the federal poverty level in 2026
The cliff is measured against your MAGI — modified adjusted gross income. For 2026, the general Premium Tax Credit income range is 100%–400% of the 2025 poverty guideline, including exactly 400%. Lowering MAGI may change the income comparison but does not guarantee eligibility. Below 100%, check whether a limited reconciliation exception applies before lowering income further.
Deductible retirement contributions
SEP-IRA or Solo 401(k) (self-employed) or a deductible traditional IRA cut MAGI dollar-for-dollar. If the calculator says you’re $4,900 over, an eligible deductible contribution at least that large may bring income to 400% or below; contribution limits and other PTC eligibility rules still apply.
HSA contributions (with a qualifying plan)
Eligible deductible HSA contributions can reduce MAGI. The 2026 annual maximum is $4,400 self-only / $8,750 family qualifying coverage, with a possible $1,000 catch-up at 55+. Coverage tier is not the same as tax-household size. Eligible months, employer contributions, and other rules affect your personal limit; payroll-excluded contributions cannot be deducted again. Qualifying individual-market Bronze and Catastrophic plans are HSA-compatible in 2026; Catastrophic plans cannot receive a Premium Tax Credit.
Time your income
Early retirees especially can shift Roth conversions, capital gains, and IRA withdrawals between years to stay under the line in a subsidy year.
Business deductions (self-employed)
Legitimate deductions — home office, equipment (Section 179), health insurance itself — lower net self-employment income and MAGI.
Frequently asked
What income counts toward the 400% cliff?
ACA uses MAGI: adjusted gross income plus any tax-exempt interest, non-taxable Social Security, and excluded foreign income. Most people's MAGI is very close to their AGI.
Does going one dollar over really cost the whole subsidy?
For 2026, household MAGI above 400% of the applicable 2025 poverty guideline is not eligible for a Premium Tax Credit. Exactly 400% is within the general income range, subject to all other eligibility rules. This income screen does not determine any repayment; reconcile advance credits on Form 8962 using your final tax-family facts.
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