Updated August 2026 · Reviewed by the CoverageCo team
ACA premium tax credit eligibility is based on your projected household income measured against the federal poverty level for your household size. For 2026, assistance generally stops above 400% of the federal poverty level. Household size matters as much as income — the same salary can qualify or not depending on how many people it supports.
Key takeaways
- Eligibility uses projected income for the coverage year, not last year's tax return.
- The threshold scales with household size, so more dependents means a higher income limit.
- Above 400% FPL for 2026, premium tax credits generally end entirely.
- Cost-sharing reductions have their own, lower income range and apply only to Silver plans.
How the measurement works
Two numbers determine eligibility: your projected household income for the coverage year, and your household size.
Those are compared against the federal poverty guidelines, which the government publishes each January and which scale with household size. Your income is expressed as a percentage of that figure — you'll see "150% FPL" or "400% FPL" — and eligibility bands are defined in those terms.
The practical consequence is that no single dollar figure answers "how much can I earn." A household of four can earn substantially more than a household of one and still qualify.
What counts as income
The Marketplace uses modified adjusted gross income, which is broader than just wages:
- Wages, salary, and tips
- Net income from self-employment
- Unemployment compensation
- Social Security benefits, including the portion that isn't taxable
- Interest, dividends, capital gains, and rental income
- Retirement account distributions that are taxable
The projection problem
This is the part that causes trouble later, and it's worth taking seriously at application.
You're estimating income for a year that hasn't happened. Subsidies are paid in advance based on that estimate, then reconciled on your tax return using Form 8962.
Underestimate, and you may have to repay some of the credit you received. Overestimate, and you got less help than you were entitled to and receive the difference back at filing.
The fix is simple and widely skipped: report income changes to the Marketplace during the year rather than waiting. Self-employed people with variable income should revisit their estimate more than once.
Two separate kinds of help
Premium tax credits and cost-sharing reductions are different programs with different income ranges, and conflating them causes people to pick the wrong plan.
| Premium tax credit | Cost-sharing reduction | |
|---|---|---|
| What it lowers | Your monthly premium | Deductible, copays, out-of-pocket max |
| Which plans | Any metal tier | Silver plans only |
| Income range | Broader, up to the 400% FPL limit for 2026 | Narrower, lower income band |
| How you get it | Applied to your premium monthly, or claimed at tax time | Built into the Silver plan you enroll in |
If your job offers coverage
Having an employer offer doesn't automatically disqualify you, but it changes the test.
If your employer's coverage is considered affordable and meets minimum value under IRS rules, you generally can't get Marketplace subsidies. If it doesn't meet those standards, you may qualify.
Since 2023, affordability for family members is measured against the cost of family coverage rather than employee-only coverage — a change that opened eligibility for families previously caught by what was known as the family glitch. See whether you qualify.
Common questions
What is 400% of the federal poverty level?
It's a threshold that scales with household size, based on federal poverty guidelines published each January. For 2026 it's the point above which premium tax credits generally end. Confirm the current dollar amounts for your household size at HealthCare.gov.
What income counts for ACA subsidies?
Modified adjusted gross income, which includes wages, self-employment income, unemployment compensation, Social Security benefits, investment income, and taxable retirement distributions.
What happens if I underestimate my income?
Advance premium tax credits are reconciled on your tax return using Form 8962. If you received more than you qualified for, you may need to repay some or all of it, subject to caps in certain income ranges.
Can I get a subsidy if my employer offers insurance?
Only if the employer coverage fails the affordability or minimum value tests under IRS rules. Since 2023, family affordability is measured against the cost of family coverage, which expanded eligibility for some households.