The ACA subsidy (tax credit): who qualifies in 2027
The help that lowers your monthly premium, often called a subsidy. Who gets it, how much, and the income limits.
Last checked October 14, 2026 · Written by licensed advisors · Sources are numbered and listed under Notes and sources
What is the Obamacare subsidy?
The premium tax credit, often called a subsidy, is help from the federal government that lowers what you pay each month for a Marketplace plan. Most people take it in advance: it is paid straight to your insurer, and your bill is smaller from the first month.
How much you get depends on your household’s yearly income, how many people are in your household, and plan prices where you live.1
- Every monthThe credit is paid straight to your insurer (key step)
- Your billSmaller from the first month
- Tax timeSettled against your real income
Who qualifies
You can usually get the credit if you buy a plan through the Marketplace (HealthCare.gov or your state’s marketplace, such as Get Covered Illinois), your household income is between 1 and 4 times the federal poverty level, and no job offers you affordable coverage.
You also can’t get it while you qualify for Medicaid, CHIP or Medicare. If you are married, you generally need to file your taxes jointly.
You also need to be a U.S. citizen or have an eligible immigration status. From 2027 the list of eligible statuses is shorter, so if you are not a citizen, check with us before you enroll.23
The 2027 income limits
In 2027 the credit stops completely once your household earns more than 4 times the poverty level. These are the limits for coverage that starts in 2027.45
| Household | No credit above |
|---|---|
| 1 person | $63,840 |
| 2 people | $86,560 |
| 3 people | $109,280 |
| 4 people | $132,000 |
| 5 people | $154,720 |
| 6 people | $177,440 |
How the amount is set
The Marketplace looks at the second-cheapest silver plan where you live, called the benchmark plan. Based on your income, you are expected to pay a set share of your income toward that plan, from 2.15% at the lowest incomes up to 10.22% just under the limit. The credit pays the rest.
Example: one person earning $40,000 would be expected to pay at most about 8.7% of income, about $289 a month, toward the benchmark silver plan. If the benchmark costs less than that where they live, there is no credit and they pay its lower full price. Choose a cheaper plan and you pay less; choose a pricier one and you pay the difference. An example, not a quote.5
If your income changes
The credit is based on your estimate for the year, and it is settled when you file taxes. If you earn more than you estimated, you pay back the difference when you file. From 2026 there is no cap on how much. If you earn less, you may get money back.
Report income changes on your Marketplace account during the year so the credit stays close to right.67
What to do: Estimate next year’s income carefully, especially if you are self-employed. Update it whenever your income changes.
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.