How Marketplace Premium Tax Credits Work in 2026 and 2027
Who qualifies for the Marketplace premium tax credit in 2026 and 2027, how it is figured from the benchmark silver plan, and how to avoid a repayment at tax time.
The premium tax credit lowers the monthly premium for a plan you buy through HealthCare.gov or your state's Marketplace. For 2026 and 2027 coverage it generally goes to households whose income is between 100% and 400% of the federal poverty line, and it equals the price of a benchmark silver plan minus a fixed share of your income.
Two rules changed after 2025: people above 400% of the poverty line no longer qualify, and advance credit you turn out not to be owed must be repaid in full. Open enrollment for 2027 coverage on HealthCare.gov runs from November 1, 2026 to January 15, 2027, and some state-run Marketplaces close later. The income estimate you give this fall sets what you pay next year.
Key takeaways
- For 2026 and 2027 coverage, the credit is available only when household income is from 100% to 400% of the federal poverty line. Above 400%, it drops to zero.
- The credit equals the premium of the second-lowest-cost silver plan where you live, minus an expected contribution. For 2027 that contribution runs from 2.15% to 10.22% of household income (2.10% to 9.96% in 2026).
- 2027 coverage uses the 2026 poverty guidelines: $15,960 for one person, so the 400% line is $63,840.
- You can take the credit in advance each month, take part of it, or claim it all on your tax return. Either way you file Form 8962.
- For tax years after 2025, any advance credit you were not entitled to must be repaid in full. There is no longer a cap.
- As of October 13, 2026, no law has brought back the enhanced credits for 2026 or 2027.
Who qualifies for the premium tax credit
You must meet all of the IRS conditions for at least one month of the year:
- You buy a plan through the Marketplace. Off-Marketplace plans and catastrophic plans do not count.
- Your household income is at least 100% and no more than 400% of the federal poverty line for your family size.
- You cannot get other qualifying coverage: no affordable employer offer that meets the minimum value standard, and no eligibility for Medicaid, Medicare, CHIP or TRICARE.
- You do not file as married filing separately, unless a special rule for victims of domestic abuse or spousal abandonment applies.
- No one can claim you as a dependent, and your share of each month's premium is paid.
"Household income" is modified adjusted gross income (MAGI). Start from adjusted gross income, then add back tax-exempt interest, any Social Security benefits that were not taxed, and any foreign income excluded from tax. Supplemental Security Income is left out. The total includes you, your spouse if you file jointly, and any dependent who has to file a return.
A job-based offer blocks the credit only if it counts as "affordable" and meets the minimum value standard. For plan years starting in 2026, an offer is affordable for the employee when the employee's share of the premium for the cheapest self-only plan is no more than 9.96% of household income. For plan years starting in 2027 the limit is 10.22%. When a spouse or child is offered coverage through someone else's job, the test uses what the employee would pay to cover those family members as well.
From plan year 2027 (tax year 2027), the credit, including advance payments, is allowed only for U.S. citizens, U.S. nationals and "eligible noncitizens": lawful permanent residents, Cuban or Haitian entrants, and people living in the U.S. under a Compact of Free Association. Other lawfully present immigrants can still enroll in a Marketplace plan but pay full price.
The income lines for each year
Marketplace savings use the poverty guidelines from the year before the coverage year. The figures below are for the 48 contiguous states and Washington, D.C.; Alaska and Hawaii have higher guidelines.
| Household size | 2026 coverage: 100% | 2026 coverage: 400% | 2027 coverage: 100% | 2027 coverage: 400% |
|---|---|---|---|---|
| 1 | $15,650 | $62,600 | $15,960 | $63,840 |
| 2 | $21,150 | $84,600 | $21,640 | $86,560 |
| 3 | $26,650 | $106,600 | $27,320 | $109,280 |
| 4 | $32,150 | $128,600 | $33,000 | $132,000 |
How the credit amount is calculated
The calculation has three parts.
- The benchmark premium. This is the price of the second-lowest-cost silver plan sold through the Marketplace where you live, for the household members who enroll. If only one silver plan is offered there, that plan is the benchmark. Any tobacco surcharge is left out of the benchmark price.
- Your expected contribution. This is a percentage of your household income, set by the IRS each year. It rises as income rises.
- The credit. The benchmark premium minus your expected contribution. The credit can never be more than the premium for the plan you actually choose.
You do not have to buy the benchmark plan. The credit is the same dollar amount whichever bronze, silver, gold or platinum Marketplace plan you pick, so a cheaper plan leaves you paying less and a richer plan leaves you paying more. If your income qualifies you for cost-sharing reductions, those come only with silver plans; see when a silver plan beats a gold plan. For how the tiers differ, see how to pick a metal tier.
| Household income as a share of the poverty line | Expected contribution, 2026 | Expected contribution, 2027 |
|---|---|---|
| Under 133% | 2.10% | 2.15% |
| 133% to under 150% | 3.14% to 4.19% | 3.23% to 4.30% |
| 150% to under 200% | 4.19% to 6.60% | 4.30% to 6.78% |
| 200% to under 250% | 6.60% to 8.44% | 6.78% to 8.66% |
| 250% to under 300% | 8.44% to 9.96% | 8.66% to 10.22% |
| 300% to 400% | 9.96% | 10.22% |
In the middle bands the percentage rises gradually with income. In the lowest band (under 133%) and the top band (300% to 400%) it is flat.
Example: A single person in one of the 48 contiguous states expects MAGI of $50,000 in 2027, and the benchmark silver plan in their area costs $700 a month ($8,400 a year). These personal figures are illustrative. Income is $50,000 ÷ $15,960 = 313% of the poverty line, so the 2027 expected contribution is 10.22%: $5,110 a year, or about $425.83 a month. The credit is $8,400 − $5,110 = $3,290 a year, about $274.17 a month. A bronze plan priced at $450 a month would cost them about $175.83; a gold plan at $820 would cost about $545.83.
Now raise the income. At $63,800 (399.7% of the poverty line) the contribution is $6,520.36 and the credit is $1,879.64 a year. At $64,000 (401%) the credit is zero. Earning $200 more costs $1,879.64 in credit.
That drop is often called the subsidy cliff. If your income is near the line, anything that lowers MAGI, such as deductible contributions to a health savings account, can keep you below it.
What changed for 2026, and where 2027 stands
The temporary expansion Congress passed for tax years 2021 through 2025 dropped the 400% ceiling and cut the expected contributions. It lapsed at the end of 2025, and the IRS contribution tables for 2026 and 2027 stop at 400% of the poverty line.
On January 8, 2026 the House voted 230 to 196 to pass H.R. 1834, which would extend the enhanced credits through 2028. The bill's latest action, on February 10, 2026, placed it on the Senate calendar, and it has not become law. The 2027 figures above assume no extension and would change if Congress acts.
Premiums may also rise. In August 2026, KFF reported that insurers had proposed a median increase of 15% for 2027; these are proposed rates, not final ones. The median final increase for 2026 was 20%. The credit rises with the benchmark premium, so if you stay in the benchmark plan your net premium stays at your expected contribution. If your own plan's price rises more than the benchmark's, you pay the difference, and above 400% there is no credit to absorb any increase.
Take the credit in advance, or at tax time
The Marketplace estimates your credit from your projected income and household. You choose to have all, some or none of it paid each month to your insurer; these are advance payments of the premium tax credit (APTC). Or you pay the full premium and claim the credit when you file. The credit is refundable, so you get it even if you owe no income tax.
- Taking the full advance gives the lowest monthly bill. The risk is a repayment at tax time if income ends up higher than estimated.
- Taking less than the full advance raises the monthly bill but shrinks any repayment. The trade-off matters most when income swings or sits near 400%.
- Reporting income and household changes to the Marketplace as they happen lets it adjust the advance payments during the year.
For the dates and steps of signing up, see the 2027 open enrollment checklist.
Reconciling on Form 8962, and repayment with no cap
By early February your Marketplace sends Form 1095-A, which shows your premiums, the benchmark premium and the advance credit paid. You use it to complete Form 8962 and attach that to your federal return. If you had advance payments, you must file a return even if you would not otherwise need to.
If your actual credit is larger than the advance payments, the difference is added to your refund. If it is smaller, the difference is added to your tax bill. For tax years before 2026, a cap limited that repayment for households under 400% of the poverty line. For tax years after 2025 there is no cap: the full excess is owed. If you cannot pay it all, the IRS offers the same payment arrangements it uses for other tax balances.
Example: A single person estimated 2026 MAGI of $48,000, which is 307% of the $15,650 guideline. The benchmark plan cost $7,200 for the year. These personal figures are illustrative. Their expected contribution was 9.96% × $48,000 = $4,780.80, so they received $2,419.20 in advance credit. Their actual 2026 income was $60,000 (383% of the guideline). The real contribution is 9.96% × $60,000 = $5,976, so the credit they were owed is $1,224. On the 2026 return filed in 2027 they repay $2,419.20 − $1,224 = $1,195.20, all of it, because the cap is gone. Had their income passed $62,600, the full $2,419.20 would have been owed.
The IRS warns that people who get advance payments and then do not file can lose advance payments in later years. For plan years 2026 and 2027, though, CMS told Marketplaces in a July 27, 2026 statement to stop removing or denying advance payments for this reason, after court rulings in June and July 2026. The legal duty to file a return and reconcile still applies.
Frequently asked questions
Can the premium tax credit be used on a bronze or gold plan?
Yes. The credit is based on the benchmark silver plan, but it can be applied to any bronze, silver, gold or platinum plan bought through the Marketplace. It cannot exceed that plan's premium and cannot be used for a catastrophic plan.
What happens if income ends up below 100% of the poverty line?
The IRS instructions for Form 8962 (2025 edition) let you keep the credit in that case if three things are true: when you enrolled, the Marketplace estimated your income would be at least 100% of the line; advance payments were made for at least one month; and you did not knowingly or recklessly give the Marketplace wrong information.
Does a spouse's job-based family coverage offer block the credit?
It does if the offer counts as affordable for the family and meets the minimum value standard. For plan years starting in 2027, that means the employee's cost to cover the family is no more than 10.22% of household income (9.96% for 2026). If the family offer is unaffordable, the family members can still qualify.
Will the enhanced credits come back for 2027?
Not as of October 13, 2026. A House-passed extension has been on the Senate calendar since February 10, 2026 without becoming law, and the IRS's 2027 contribution table assumes no extension. Check HealthCare.gov before open enrollment ends on January 15, 2027.
Sources
- Questions and answers on the Premium Tax Credit (Internal Revenue Service)
- Revenue Procedure 2026-26: 2027 applicable percentage table (Internal Revenue Service)
- Revenue Procedure 2025-25: 2026 applicable percentage table (Internal Revenue Service)
- Instructions for Form 8962 (2025) (Internal Revenue Service)
- Federal poverty level (FPL) (HealthCare.gov)
- Guidance on noncitizen eligibility for APTC and CSRs, plan year 2027 (Centers for Medicare & Medicaid Services)
- H.R. 1834, 119th Congress: actions (Congress.gov)
- How much and why ACA Marketplace premiums are going up in 2027 (KFF)