Guide · Use with the health tab of the Insurance Premium Estimator
How the ACA Premium Tax Credit Works for 2027 Coverage
For 2027 marketplace coverage, the premium tax credit follows the original Affordable Care Act rules: households between 100% and 400% of the federal poverty line can get help, and households above 400% get none. Since tax year 2026, anyone who receives too much credit in advance must also repay all of it. This guide shows how the credit is worked out, step by step, with examples you can reproduce in the estimator.
What changed for 2027
- The 400% cut-off is back. From 2021 to 2025, Congress temporarily removed the upper income limit and lowered what people paid (IRS, Q&A on the premium tax credit). Those enhanced credits expired at the end of 2025. The House passed a three-year extension (H.R. 1834) on 8 January 2026, but in the latest bill-status record we checked (updated 8 September 2026) it was still waiting on the Senate calendar and had not become law (GovInfo bill status).
- Higher contribution percentages. For 2027, the IRS sets what you are expected to pay toward the benchmark plan at 2.15% to 10.22% of income (Rev. Proc. 2026-26).
- No repayment cap. Beginning with tax year 2026, you must repay the full amount of any excess advance credit; the old repayment limits no longer apply (IRS).
- Tighter eligibility checks. On 14 October 2026, Treasury and the IRS proposed rules that, from 2027, limit the credit to US citizens, US nationals and certain lawfully present noncitizens, and add verification for advance payments (Treasury press release). These are proposed rules, so details may change.
Who can get the credit
According to the IRS, you generally qualify if all of these are true:
- You or a family member enrol in a marketplace plan (not a catastrophic plan).
- Household income is at least 100% and no more than 400% of the federal poverty line for your family size.
- The person covered can't get affordable, minimum-value coverage from an employer, and isn't eligible for Medicaid, Medicare, CHIP or TRICARE.
- You don't file as married filing separately (with limited exceptions), and nobody else can claim you as a dependent.
The calculation, step by step
1. Your income as a share of the poverty line
Eligibility uses the poverty guidelines published before open enrollment starts, so 2027 coverage uses the 2026 guidelines (IRS). For the 48 contiguous states and DC, that is $15,960 for one person plus $5,680 for each additional person. Alaska ($19,950 plus $7,100) and Hawaii ($18,360 plus $6,530) have higher figures (HHS 2026 poverty guidelines).
| Household size (48 states and DC) | 100% of the poverty line | 400% (the cut-off) |
|---|---|---|
| 1 | $15,960 | $63,840 |
| 2 | $21,640 | $86,560 |
| 3 | $27,320 | $109,280 |
| 4 | $33,000 | $132,000 |
2. Your expected contribution
The IRS table sets the share of income you are expected to pay toward the benchmark plan. Within each band, the percentage rises in a straight line from the starting figure to the ending figure.
| Income, % of poverty line | Expected contribution, 2027 |
|---|---|
| Below 133% | 2.15% |
| 133% to under 150% | 3.23% rising to 4.30% |
| 150% to under 200% | 4.30% rising to 6.78% |
| 200% to under 250% | 6.78% rising to 8.66% |
| 250% to under 300% | 8.66% rising to 10.22% |
| 300% to 400% | 10.22% |
| Above 400% | No credit |
Source: IRS Rev. Proc. 2026-26, section 3.01, for taxable years beginning in 2027.
3. The benchmark plan
The credit is sized from the second-lowest-cost Silver plan available to you, not from the plan you choose. Its price depends on where you live and your age. Under the federal default age curve, a 60-year-old's premium is 2.714 times a 21-year-old's, and anyone 64 or older pays 3 times (CMS age curve; some states use their own curve).
4. The credit and what you pay
What you pay = price of the plan you choose − credit
Worked examples
These use the estimator's health tab with ZIP code 30301 and a household of one. The estimator's base prices are its own illustrative figures, but the poverty line, percentages and age curve are the official ones above, so the steps are the same as on the marketplace.
Example 1: age 40, $30,000 income
| Step | Calculation | Result |
|---|---|---|
| Income vs poverty line | $30,000 ÷ $15,960 | 188% |
| Applicable percentage | 4.30% + 2.48% × (188% − 150%) ÷ 50% | 6.18% |
| Expected contribution | $30,000 × 6.18% ÷ 12 | $154.58 a month |
| Benchmark Silver price | $420 × 1.278 (age 40) | $536.76 |
| Premium tax credit | $536.76 − $154.58 | $382.18 |
With that credit, this person would pay $26.78 a month for Bronze ($408.96 − $382.18), $154.58 for Silver and $282.38 for Gold. The credit is the same whichever plan they pick; only their share changes.
Example 2: the 400% cliff at age 60
Now a 60-year-old living alone. The benchmark Silver price in the estimator is $420 × 2.714 = $1,139.88 a month.
| Income | % of poverty line | Credit | Silver premium | Silver for the year |
|---|---|---|---|---|
| $63,000 | 394.7% | $603.33 | $536.55 | $6,438.60 |
| $63,840 | 400.0% | $596.18 | $543.70 | $6,524.40 |
| $64,500 | 404.1% | $0 | $1,139.88 | $13,678.56 |
Earning $1,500 more, from $63,000 to $64,500, raises this person's yearly premium by $7,239.96. That is the cliff: just above 400%, the whole credit disappears at once. Older enrollees feel it most, because their benchmark premium is higher.
Example 3: when the estimate turns out wrong
Suppose the 60-year-old in Example 2 expects $63,000, receives the $603.33 credit in advance every month, and then earns $64,500. When they file their 2027 tax return, they are no longer eligible, so they must repay the whole $7,239.96. Before 2026, a repayment cap limited this for many households; that cap no longer applies.
How to read your estimate
- The estimator shows the credit as a note under the result. If it reads $0 and your income is above 400% of the poverty line, the cliff is the reason.
- Below 100% of the poverty line, the estimator shows $0 and points you to Medicaid. In states that expanded Medicaid, adults generally qualify with income below 133% of the poverty line, which works out to 138% under the way Medicaid counts income (HealthCare.gov). In states that didn't expand, people below 100% may get neither Medicaid nor marketplace savings.
- The estimator prices one person. For a couple or a family, the household size changes the poverty line, but the real benchmark premium covers everyone enrolled, so a family's real credit will be larger than the estimate.
Common mistakes
- Assuming the 2021–2025 rules still apply. For 2027, there is no credit above 400% of the poverty line.
- Underestimating income to get a bigger advance credit. Since tax year 2026, every dollar of excess advance credit is repaid at tax time.
- Thinking a cheaper plan means a smaller credit. The credit comes from the benchmark Silver price, so choosing Bronze keeps the same credit and lowers what you pay.
- Using the wrong year's poverty line. 2027 coverage uses the 2026 guidelines, not the 2027 ones published in early 2027.
- Forgetting that income means MAGI. Marketplaces use modified adjusted gross income. Pre-tax contributions to a traditional 401(k) lower it, which can matter if you are near 400%.
Questions people ask
When can I enrol for 2027?
On HealthCare.gov, open enrollment for 2027 runs from 1 November 2026 to 15 January 2027. Enrol by 15 December 2026 for coverage that starts on 1 January (HealthCare.gov). States that run their own marketplace can set different dates.
Could the enhanced credits still come back for 2027?
Only if Congress passes a law. As of our last check, the House-passed extension had not passed the Senate. We will update this guide if that changes.
Does the estimator use my real benchmark plan?
No. It uses its own Silver price as a stand-in. Use HealthCare.gov's plan preview, or your state's marketplace, to see real prices and your actual credit.
Related tools and guides
- Insurance Premium Estimator: try your own age, income and ZIP code on the health tab.
- Retirement Runway Calculator: if you plan to retire before Medicare at 65, marketplace premiums belong in your budget.
- When to claim Social Security: early retirees often weigh the two decisions together.
Sources
- IRS Revenue Procedure 2026-26: applicable percentages and required contribution percentage for 2027
- HHS (ASPE) 2026 poverty guidelines, used for 2027 coverage
- IRS, Questions and answers on the premium tax credit (page updated 21 September 2026)
- IRS, Repayment caps eliminated for excess advance payments (tax year 2026 onward)
- CMS, State Specific Age Curve Variations (default age curve)
- HealthCare.gov, Dates and deadlines and Medicaid expansion and you
- GovInfo, bill status for H.R. 1834 (119th Congress)
- US Treasury press release, 14 October 2026: proposed premium tax credit regulations
The dollar premiums in the examples come from the estimator's illustrative base prices, not from any insurer or marketplace. Rules can change, and your own credit depends on your real benchmark plan and final income. This guide explains how the credit works. It is not tax, insurance or legal advice. How we check our calculations.