For plan years 2021 through 2025, Marketplace premium tax credits were temporarily more generous than the Affordable Care Act’s original sliding scale. Those “enhanced” credits — first expanded by the American Rescue Plan Act and later extended by the Inflation Reduction Act — ended on December 31, 2025. Coverage that starts in 2026 is priced with the pre-enhancement structure, as indexed by the Internal Revenue Service in Revenue Procedure 2025-25. This page explains what that change does to a household that is comparing COBRA with a Marketplace plan after a job loss.
Nothing here is a tax opinion or an enrollment decision. Premium tax credits are claimed on Form 8962 when you file a federal return, and the amount you see on HealthCare.gov is an advance based on the income you attest. If actual MAGI comes in higher, you can owe some or all of the advance back, subject to repayment caps that themselves depend on income. If MAGI comes in lower, you may receive an additional credit at filing. Verify current percentages and your ZIP-level benchmark premium on HealthCare.gov or your state Marketplace.
What expired on December 31, 2025
The enhanced-credit rules did two things that people came to treat as normal. First, they lowered the applicable percentage of income a household was expected to spend on the benchmark silver plan, including 0% contributions at the lowest incomes. Second, they removed the so-called “subsidy cliff” so that households above 400% of the federal poverty level (FPL) could still receive a credit if the benchmark plan would otherwise cost more than 8.5% of income.
Both features sunset with the 2025 plan year. For 2026 they are gone. A household at 150% of FPL is no longer looking at a token contribution. A household at 450% of FPL is no longer looking at a cap that holds the benchmark plan to 8.5% of income. That second group — dual-income households, people with severance that pushes MAGI over the line, and many COBRA-eligible professionals — will see the largest sticker shock relative to 2024–2025 enrollments.
This calculator does not keep an “IRA-enhanced” table in the code. If another site still shows 0% to 8.5% with no 400% cutoff, it is describing a year that has already ended.
The 2026 applicable percentages (Rev. Proc. 2025-25)
The credit is built around a single idea: the federal government expects you to contribute a percentage of household MAGI toward the second-lowest-cost silver plan (SLCSP) available to your family in your rating area. If the SLCSP costs more than that expected contribution, the difference is the premium tax credit. You can apply the credit to a bronze, silver, gold, or platinum plan; if you pick a plan cheaper than the SLCSP, you can end up with a very low or zero net premium. If you pick a more expensive plan, you pay the extra.
For 2026 this site uses the following applicable percentages, matching Revenue Procedure 2025-25 as implemented in our estimator:
| Household MAGI as % of FPL | Expected contribution toward SLCSP |
|---|---|
| Under 100% | No Marketplace premium tax credit (see Medicaid / coverage gap) |
| 100% to under 133% | 2.10% of MAGI |
| 133% to 150% | 3.14% rising to 4.19% |
| 150% to 200% | 4.19% rising to 6.60% |
| 200% to 250% | 6.60% rising to 8.44% |
| 250% to 300% | 8.44% rising to 9.96% |
| 300% to 400% | 9.96% of MAGI |
| Above 400% | No premium tax credit |
Between the listed breakpoints the percentage is interpolated on a straight line (a “lerp”), which is how the IRS tables are applied in software. At 133% there is a step from 2.10% to 3.14%. From 300% through 400% the rate is flat at 9.96%. Those details matter when someone is hovering near a breakpoint after a partial-year paycheck and a few months of unemployment.
Worked example, illustration only: a single adult with expected 2026 MAGI of $33,000 is essentially at 207% of the 2026 HHS FPL for a one-person household in the 48 contiguous states ($15,960). That income sits in the 200–250% band. The applicable percentage is interpolated from 6.60% toward 8.44%. The expected annual contribution is that percentage times $33,000. Divide by 12 for a monthly cap. Subtract that cap from a local SLCSP to get the credit. This site cannot do the last step with a real local SLCSP; it uses a 2026 national-average age curve as an illustration. Your ZIP can easily be 20–40% different.
The 400% FPL cliff is back
In 2026, crossing 400% of FPL does not taper the credit to zero. It turns the credit off. One extra dollar of MAGI at the line is a cliff, not a slope. That is the original ACA design, and it is why year-of-layoff tax planning is part of a coverage decision rather than a January afterthought.
400% of 2026 FPL in the 48 contiguous states is $63,840 for a single person, $86,560 for two, $109,280 for three, and $132,000 for four. Alaska and Hawaii use higher HHS guidelines; this calculator uses the contiguous-states table and says so in the methodology. Severance paid as wages, converting a traditional IRA, harvesting capital gains, or a spouse’s overtime can push a household over the line even when “the job is gone.” Conversely, a mid-year layoff without much severance often drops MAGI well below 400% even if the old salary was high.
If this calculator shows income above 400% FPL, the Marketplace side of the comparison is an unsubsidized national-average illustration. COBRA may or may not be cheaper than that unsubsidized premium; the only way to know is to compare your actual COBRA notice with a real HealthCare.gov quote. Do not assume you “must” take COBRA just because the credit is zero — some unsubsidized bronze plans still undercut family COBRA — and do not assume the reverse either.
Below 100% FPL, and the 138% Medicaid line
Marketplace premium tax credits generally require MAGI of at least 100% of FPL (with limited exceptions, such as certain lawfully present immigrants who are ineligible for Medicaid). In 2026 that floor is back in force alongside the 400% ceiling. A very low estimated income is not automatically “more subsidy.” It can mean no Marketplace credit at all.
Medicaid expansion states — every state and D.C. except a short remaining non-expansion list — typically cover adults up to 138% of FPL. For 2026 FPL, 138% for a single adult in the contiguous states is about $22,025. If you live in an expansion state and your expected MAGI is under that line, Medicaid is usually the coverage to check first. It is not a Marketplace silver plan, it is not COBRA, and it does not use the applicable-percentage table above.
Non-expansion states used by this calculator are Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming. In those states, adults who are not in a traditional Medicaid category (for example pregnancy, disability, or very low-income parents under a state-specific parent cutoff) and whose MAGI is under 100% FPL often fall into the coverage gap: too little income for a premium tax credit, too much or the wrong category for Medicaid. COBRA, a spouse’s job-based plan, a parent’s plan if you are under 26, or other non-Marketplace coverage may be the realistic set of options. This site will flag that gap when you select a non-expansion state and enter income under 100% FPL. It cannot judge disability, pregnancy, or parent-category Medicaid; those determinations belong to the state agency.
In a non-expansion state, MAGI between 100% and 138% of FPL is different: those households generally can receive a Marketplace credit (starting at 2.10% of income below 133% FPL). That is one of the few situations where a slightly higher reported income can open a credit that a lower figure would close. Do not inflate income on an application. Do understand the 100% floor if you are in a non-expansion state and almost all of your year is unemployment with little other MAGI.
What MAGI includes after a layoff
Modified adjusted gross income for Marketplace purposes starts from AGI and adds certain items, including non-taxable Social Security benefits, tax-exempt interest, and foreign earned income exclusions. Unemployment compensation is taxable and counts. Pre-tax 401(k) deferrals reduce MAGI; Roth conversions increase it. A spouse’s wages count even if only one of you lost a job. These details are why “I made $90,000 last year” is the wrong input for a 2026 credit estimate.
If you are on COBRA for part of the year and a Marketplace plan for the rest, the credit is still annual and is allocated by coverage months. Paying COBRA does not by itself change MAGI, but the job that produced the COBRA-qualifying event usually does. Keep pay stubs, unemployment statements, and severance documents. You will need them for the Marketplace application and again at tax filing.
What this means for a COBRA comparison
In 2021–2025, many mid-income households saw Marketplace plans win on premium alone because the enhanced scale capped contributions and ignored the 400% cliff. In 2026 that automatic win is narrower. Households under roughly 250% of FPL often still see a meaningful credit. Households from 300% to 400% contribute 9.96% of MAGI toward the benchmark plan — a much heavier expected contribution than 8.5% of income with no cliff. Households over 400% compare full price to full price.
COBRA still ignores income. It is a continuation premium plus up to 2%. That can look worse than a subsidized silver plan and better than an unsubsidized family premium, depending on age, tobacco rating where allowed, and local silver prices. Run both sides with 2026 assumptions, then confirm the Marketplace side at HealthCare.gov with your ZIP. Read when COBRA still wins for the non-price reasons (specialists, HSAs, short gaps) that a subsidy table will never capture.
Data sources used on this site are listed on the methodology page: 2026 HHS poverty guidelines for the 48 contiguous states, Rev. Proc. 2025-25 applicable percentages, a 2% COBRA administrative fee, the three-child age-under-21 cap in premium rating, and a national-average SLCSP curve labeled as an illustration. If Congress later restores enhanced credits for a future year, this page and the calculator would need another update. For 2026 they are not in force.