What Income Qualifies for a Health Insurance Subsidy?

To qualify for a health insurance subsidy through the marketplace in 2026, your household’s Modified Adjusted Gross Income (MAGI) generally needs to fall between 100% and 400% of the Federal Poverty Level. For a single person, that means roughly $15,960 to $63,840 in annual income. For a family of four, the range runs from about $33,000 to $132,000. What income qualifies for a health insurance subsidy depends not just on the dollar amount but on which types of income the marketplace counts, how many people are in your household, and whether you have other disqualifying coverage available.

2026 Income Ranges by Household Size

The marketplace uses the Federal Poverty Level, updated annually by the Department of Health and Human Services, as the basis for eligibility.1Federal Register. Annual Update of the HHS Poverty Guidelines For the 48 contiguous states and D.C., your MAGI needs to land inside these brackets for 2026:2ASPE. 2026 Poverty Guidelines: 48 Contiguous States

  • 1 person: $15,960 to $63,840
  • 2 people: $21,640 to $86,560
  • 3 people: $27,320 to $109,280
  • 4 people: $33,000 to $132,000
  • 5 people: $38,680 to $154,720
  • 6 people: $44,360 to $177,440

Alaska and Hawaii use higher poverty guidelines, so the dollar thresholds there are higher too. Households below the 100% floor generally qualify for Medicaid instead of marketplace subsidies in the 41 states (plus D.C.) that expanded Medicaid. In the non-expansion states, adults under 100% FPL can fall into a coverage gap: too poor for a premium tax credit, too well-off for their state’s Medicaid.3HealthCare.gov. Federal Poverty Level – Glossary

Your household, for these purposes, is you, your spouse if you’re married, and anyone you claim as a tax dependent.4HealthCare.gov. Who’s Included in Your Household Every household member who is required to file a tax return has their income added to the total. An adult child who lives with you but files independently and isn’t your dependent belongs on their own separate marketplace application.5CMS. Household Size and Types of Income to Include on a Marketplace Application

What Counts as Income for MAGI

MAGI is not the number on your paycheck and not your gross pay. It starts with the Adjusted Gross Income figure at the bottom of page one of your federal tax return, then adds back three specific items: tax-exempt interest (such as municipal bond income), any income excluded under the foreign earned income exclusion, and the non-taxable portion of Social Security benefits.6Office of the Law Revision Counsel. 26 USC 36B – Refundable Credit for Coverage Under a Qualified Health Plan

For most wage earners, MAGI comes out identical to AGI because none of those three add-backs apply. If you draw Social Security, hold municipal bonds, or work abroad, they do, and skipping them produces an income estimate that’s too low. That means more subsidy upfront and money owed back at tax time.

Beyond wages, MAGI includes self-employment income after business deductions, unemployment compensation, investment gains, rental income, retirement account distributions, and alimony from divorces finalized before 2019.7HealthCare.gov. What to Include as Income Self-employed applicants can deduct business expenses to lower AGI, and the self-employed health insurance deduction reduces AGI further, though only for premium amounts you actually pay after subsidies are applied.

Income That Doesn’t Count

Several common income sources sit outside MAGI entirely, and leaving them out of your estimate can be the difference between qualifying and missing the ceiling. The marketplace does not count:7HealthCare.gov. What to Include as Income

  • Child support
  • Gifts and inheritances
  • Loan proceeds
  • Supplemental Security Income (SSI)
  • Veterans’ disability payments
  • Workers’ compensation
  • Child Tax Credit payments
  • Alimony from divorces finalized on or after January 1, 2019

A veteran drawing $18,000 in disability payments alongside $30,000 in wages reports a MAGI of $30,000, not $48,000. Getting that right can shift someone from a small subsidy to a substantial one.

How Much Subsidy You Actually Get

Qualifying and getting a large credit are two different things. The premium tax credit caps what you’re expected to pay for a benchmark silver plan (the second-lowest-cost silver plan in your area) at a percentage of your household income. Your credit is the difference between that expected contribution and the benchmark plan’s actual price. The percentage slides with income. For 2026:8Internal Revenue Service. Revenue Procedure 2025-25

  • Below 133% FPL: no more than 2.10% of income
  • 133% to 150% FPL: 3.14% to 4.19%
  • 150% to 200% FPL: 4.19% to 6.60%
  • 200% to 250% FPL: 6.60% to 8.44%
  • 250% to 300% FPL: 8.44% to 9.96%
  • 300% to 400% FPL: 9.96%

Within each bracket, the applicable percentage slides gradually from the lower figure to the upper one. A single person earning $20,000 (around 125% FPL) is expected to pay about 2.10% of income, roughly $35 a month, toward the benchmark plan. A single person earning $55,000 (around 345% FPL) is expected to pay 9.96%, about $456 a month. If the benchmark plan in that person’s county costs less than $456, no credit is paid, because the plan is already considered affordable at that income.

You can apply the credit to any metal tier, not just silver. But if your income falls between 100% and 250% FPL, silver plans also come with cost-sharing reductions that lower deductibles and copays, a benefit lost if you use the credit toward a bronze or gold plan instead.9CMS. What Are Cost-Sharing Reductions and How Can Consumers Qualify

The 400% Cliff Is Back for 2026

From 2021 through 2025, enhanced subsidies under the American Rescue Plan Act and the Inflation Reduction Act removed the hard 400% cutoff and capped anyone’s expected premium contribution at 8.5% of income. Those enhancements expired at the end of 2025.10Internal Revenue Service. Updates to Questions and Answers About the Premium Tax Credit

For 2026, the original cliff is back in full force. Exceeding 400% FPL by a single dollar wipes out the entire premium tax credit. A single filer at $63,840 qualifies; the same filer at $64,000 receives nothing. The maximum expected contribution for people in the 300 to 400% band has also reverted from 8.5% to 9.96% of income.8Internal Revenue Service. Revenue Procedure 2025-25

Non-Income Rules That Can Still Disqualify You

Sitting inside the income range isn’t always enough. A few other conditions can knock out eligibility:

Affordable employer coverage. If your employer offers a plan that meets minimum value standards and your share of employee-only premiums is 9.96% of household income or less for 2026, you generally can’t claim the credit.8Internal Revenue Service. Revenue Procedure 2025-25 Family members get a separate affordability test based on the cost of family coverage, so a spouse and children can still qualify for marketplace subsidies if adding them to the employer plan pushes the family premium above 9.96% of household income, even where the employee’s own coverage is affordable.

Filing status. Married couples generally must file jointly to receive the credit.11Internal Revenue Service. Eligibility for the Premium Tax Credit Married filing separately disqualifies you, with narrow exceptions for victims of domestic abuse or spousal abandonment who meet IRS criteria. A married person who lived apart from a spouse for the last six months of the year and maintains a home for a dependent child may file as head of household and preserve eligibility.

Citizenship and other coverage. You must be a U.S. citizen or lawfully present immigrant. You cannot be claimed as someone else’s tax dependent, and you cannot be eligible for Medicare, Medicaid, or CHIP. If your income puts you in Medicaid territory, the marketplace routes you there rather than issuing a premium tax credit.

Why Estimating Accurately Matters More in 2026

The income you report on your application is an estimate for the coming year. When you file your tax return, you reconcile the advance credits you actually received against what your final MAGI shows you qualified for, using Form 8962.12Internal Revenue Service. Premium Tax Credit – Claiming the Credit and Reconciling Advance Credit Payments Come in lower than expected, get a bigger refund. Come in higher, owe some or all of the excess back.

Beginning with the 2026 plan year, there are no caps on how much excess advance credit you have to repay.13CMS. New FAQs Available – Repaying Excess APTC for Plan Year 2026 In prior years, filers below 400% FPL had repayment ceilings ranging from a few hundred to a few thousand dollars. That safety net is gone. Someone who received $6,000 in advance credits and turns out to have qualified for only $2,000 owes the full $4,000 difference.

The practical takeaway: report income changes to the marketplace as they happen during the year.14CMS. Report Life Changes When You Have Marketplace Coverage A raise, a new side income, gaining access to employer coverage, or a change in household size all shift your subsidy. The marketplace has no way of knowing unless you tell it, and advance payments keep flowing at the old rate in the meantime. Under the 2026 rules, that gap between reality and estimate is entirely on you at tax time.