The subsidy cliff, explained
Earn one dollar over the limit and the whole tax credit stops. Here is where the cliff is, and what to do if you are near it.
Last checked October 14, 2026 · Written by licensed advisors · Sources are numbered and listed under Notes and sources
What the cliff is
From 2021 through 2025, extra federal help meant people above 4 times the poverty level could still get a tax credit. That extra help ended with 2025. The old rule is back: above 4 times the poverty level, the credit stops completely, not gradually.
That is why it is called a cliff. Just under the limit you pay at most 10.22% of your income toward the benchmark silver plan. Just over it, you pay the full price.1
Where the cliff is for your household
These are the 2027 limits: household income above these amounts gets no tax credit.2
| Household | Cliff at |
|---|---|
| 1 person | $63,840 |
| 2 people | $86,560 |
| 3 people | $109,280 |
| 4 people | $132,000 |
| 5 people | $154,720 |
| 6 people | $177,440 |
An example
One person earning $63,000, just under the cliff, would be expected to pay about $537 a month toward the benchmark silver plan; the credit covers the rest. At $64,000, just over it, there is no credit, and they pay the plan’s full price, which depends on their age and county and can be far higher. An example, not a quote.1
If you are close to the line
The cliff is measured on your modified adjusted gross income, so pre-tax money can change which side you land on. Contributions to a traditional IRA, a 401(k), a SEP-IRA or an HSA usually lower it. Ask your tax professional what applies to you.
Above the cliff, compare a full-price Marketplace plan with a private plan. A private plan can cost less for healthy people, but it is not ACA-compliant: it can ask health questions, decline you or exclude a condition you already have.34
What to do: If your income lands within a few thousand dollars of your limit, talk to us before you enroll.
Related guides
Obamacare Hotline and/or Medicare Po Polsku are private companies not affiliated with any local, state, or federal government agency. This guide is general information, not tax or legal advice.