2027 Subsidy Cliff Calculator

How the 2027 subsidy cliff works

The enhanced tax credits that let higher earners get help ended after 2025. For 2027 the old rule is back: if your household income is above 400 percent of the federal poverty level, you get no premium tax credit at all. For 2027 coverage that line is $63,840 for one person, $86,560 for two, $109,280 for three and $132,000 for a family of four.

Below the line, the credit caps what you pay for the benchmark silver plan at a share of your income. Above it, you pay whatever the plan costs. That jump is why it's called a cliff.

What counts as income

The Marketplace uses modified adjusted gross income for everyone in your tax household. For most people that's close to adjusted gross income on the tax return. If you work for yourself, it's net profit after business expenses, not what clients pay you. A spouse's wages, interest, dividends, rental profit and taxable retirement withdrawals count too.

Child support received doesn't count. Social Security benefits generally do, including the untaxed part. If you're not sure, use last year's return as a starting point and adjust.

Ways people get back under the line

If you're only a little over, legitimate planning can sometimes bring countable income under the line. Contributions to a traditional 401(k), SEP-IRA or solo 401(k) usually lower adjusted gross income, and so do HSA contributions when you're on an HSA-eligible plan. Self-employed people sometimes have room to time an expense or an invoice across the year-end, within the tax rules.

General information, not tax advice — confirm with your CPA based on your specific entity structure.

If you're over the line

Full-price Marketplace plans are expensive in most of my states for 2027, especially for people in their 50s and early 60s. If you're healthy, a private plan priced on your age, location and health answers instead of your income may cost less, and it can start the first of any month if approved. Approval isn't certain and benefits vary by plan, so I show both side by side before you apply.

Is the subsidy cliff back for 2027?

Yes. With the enhanced credits gone, the premium tax credit stops at 400 percent of the federal poverty level for 2027 coverage.

What is 400 percent of the poverty level for a family of four?

$132,000 for 2027 coverage in the 48 contiguous states and DC.

What if I go over the line after I enroll?

You repay the advance credit you received when you file your taxes, and for 2026 and later there's no cap on that repayment. Update your income on your application as soon as you know it changed.

Does this calculator work for every state?

It uses the poverty guidelines for the 48 contiguous states and DC, which covers every state I'm licensed in. A few states run their own exchanges and may add their own help, so ask me about yours.