The applicable figure on Form 8962 is a four-decimal number you look up in Table 2 of the IRS instructions, then enter on Line 7. It represents the share of your household income the government expects you to spend on health insurance, and it drives the entire Premium Tax Credit calculation.1Internal Revenue Service. Instructions for Form 8962 For 2026, these figures are significantly higher than in recent years because the enhanced subsidies available from 2021 through 2025 have expired.
What the Number Does on the Form
The IRS uses the applicable figure together with your total household income to calculate your annual and monthly contribution amounts. Those contribution amounts are then compared against the cost of a benchmark plan to determine how much credit you receive.
Someone earning just above the poverty line gets a very low applicable figure, meaning they’re expected to pay almost nothing toward premiums. Someone closer to 400% of the poverty line gets a higher figure and shoulders a larger share. The number rises gradually across income levels so the transition isn’t a sudden jump.
Step 1: Calculate Your Household Income Percentage on Line 5
The applicable figure depends entirely on where your household income falls relative to the federal poverty line for your household size. You cannot look up the figure until Line 5 is done.
The math is straightforward. Divide your total household Modified Adjusted Gross Income (Line 3 of Form 8962) by the poverty line amount for your household size (Line 4), then multiply by 100. Drop everything after the decimal point without rounding. If the result is 185.99, you enter 185, not 186.2Internal Revenue Service. Instructions for Form 8962
MAGI for this purpose equals your adjusted gross income plus three specific add-backs: foreign earned income, tax-exempt interest, and nontaxable Social Security benefits.3Internal Revenue Service. Modified Adjusted Gross Income If none of those apply, MAGI is simply your AGI. Everyone in your household required to file a return has their MAGI counted toward the total. Household size includes you, your spouse if filing jointly, and any dependents claimed on the return.
For 2026, the federal poverty line amounts for the 48 contiguous states and D.C. are:
- 1 person: $15,960
- 2 people: $21,640
- 3 people: $27,320
- 4 people: $33,000
Each additional household member adds $5,680.4U.S. Department of Health and Human Services. 2026 Poverty Guidelines Alaska and Hawaii use separate, higher amounts listed in the Form 8962 instructions.
Two special results to watch for. If the calculation exceeds 400, you enter 401 on Line 5. For 2026, that means no credit and repayment of any advance payments. If the result is below 100, special rules may still allow the credit in limited circumstances, such as when your actual income fell short of the estimate you provided at enrollment.
Step 2: Look Up Your Applicable Figure in Table 2 for Line 7
With Line 5 in hand, open Table 2 in the Form 8962 instructions for the tax year you’re filing. The table lists every integer percentage in the left column with a corresponding four-decimal figure in the right column. Find the row matching your Line 5 number and copy that four-decimal figure onto Line 7.1Internal Revenue Service. Instructions for Form 8962
The table spans several pages because it covers every whole-number percentage from below 100 up through 400. Each row has its own unique value. There is no interpolation, averaging, or estimation. If Line 5 says 237, you find the row for 237 and use exactly the decimal printed there.
One common mistake trips people up: using the wrong year’s table. The IRS updates Table 2 annually, and last year’s table can produce a completely wrong credit amount. Always download the instructions matching your tax year, especially for 2026, when the figures differ substantially from 2025.5Internal Revenue Service. About Form 8962, Premium Tax Credit
What the 2026 Figures Look Like
For 2026, the applicable percentages revert to the original Affordable Care Act schedule as adjusted for inflation, because the temporarily reduced percentages that applied from 2021 through 2025 have expired.6Office of the Law Revision Counsel. 26 USC 36B – Refundable Credit for Coverage Under a Qualified Health Plan The IRS published the 2026 adjusted percentages in Revenue Procedure 2025-25:
- Below 133% of FPL: 2.10%
- 133% to just under 150%: 3.14% rising to 4.19%
- 150% to just under 200%: 4.19% rising to 6.60%
- 200% to just under 250%: 6.60% rising to 8.44%
- 250% to just under 300%: 8.44% rising to 9.96%
- 300% to 400%: 9.96%
These percentage ranges translate into the specific four-decimal values you’ll find in Table 2. At exactly 200% of FPL, for instance, the applicable figure will be approximately 0.0660 rather than the 0.0200 shown on the 2025 table. Compare that against recent years, when someone at 200% of the poverty line had an applicable percentage of just 2.0% and even households above 400% could still qualify for some help. The 2026 figures are meaningfully higher, and anyone above 400% is cut off entirely.
Using the Figure to Finish the Calculation
Once the applicable figure sits on Line 7, the rest of the math follows a fixed sequence.
Line 8a is your annual contribution. Multiply your household income on Line 3 by the applicable figure on Line 7, then round to the nearest whole dollar. This is the total the government expects your household to pay toward premiums for the year.2Internal Revenue Service. Instructions for Form 8962
Line 8b is your monthly contribution. Divide Line 8a by 12 and round to the nearest whole dollar. This monthly figure is what gets compared against the benchmark plan premium.
Here’s how it plays out. A family of four with $66,000 in household income sits at exactly 200% of the 2026 poverty line ($33,000 × 2). Their applicable figure would be approximately 0.0660. Multiplying $66,000 by 0.0660 produces an annual contribution of $4,356 on Line 8a, or $363 per month on Line 8b. If their benchmark second lowest cost silver plan (SLCSP) premium is $900 per month, the credit covers the $537 difference.
The SLCSP premium comes from Column B of Form 1095-A, which the Marketplace sends to everyone who had exchange coverage during the year.7Internal Revenue Service. Form 8962, Premium Tax Credit Your credit for any given month equals the SLCSP premium minus your Line 8b contribution. If your contribution exceeds the SLCSP for a month, the credit for that month is zero. The credit never goes negative and never exceeds the actual premium you paid for the plan you chose.
Why Getting the Figure Right Matters More in 2026
Two 2026 changes raise the cost of an error on Line 7.
First, the enhanced subsidies from 2021 through 2025 have sunset. Your applicable figure for 2026 will be higher than it was for the same income level in 2025, meaning a larger expected contribution and a smaller credit. Households above 400% of the poverty line get no credit at all and must repay every dollar of any advance payments received.
Second, the repayment caps are gone. In prior years, taxpayers who received too much in advance credit were protected by dollar limits on how much they had to pay back, tied to income level. For tax years beginning after December 31, 2025, Section 71305 of Public Law 119-21 eliminated the repayment limitation entirely.8Internal Revenue Service. One, Big, Beautiful Bill Provisions9U.S. Congress. Public Law 119-21 You owe back every dollar of excess advance payments regardless of your income.
If you’re completing the form by hand, verify three things before you move on: that you pulled Table 2 from the instructions matching your tax year, that your Line 5 percentage was calculated by dropping decimals rather than rounding, and that the figure on Line 7 matches the exact row for your Line 5 number. Most tax software handles the lookup automatically once you enter income, household size, and 1095-A data, but a manual check protects against a surprise tax bill.