What income thresholds trigger loss of ACA premium tax credit eligibility in 2025-2026?

1. What triggers loss of eligibility in 2025: the retained minimum, not a new cliff

For coverage in 2025 the statutory enhancements in effect since ARPA mean the PTC is still available without the traditional 400% FPL upper limit; the clear floor remains that household income must be at least 100% of the federal poverty level (with narrow exceptions) ^{[1] [2]}. In short, for 2025 the primary income trigger to be ineligible is falling below the 100% FPL floor (unless other eligibility rules apply) — available sources do not mention a reintroduction of a 400% cap for 2025 ^{[1] [2]}.

2. The 2026 change most people are asking about: the 400% cliff returns unless Congress extends enhancements

Multiple policy trackers and analyses say the enhanced credits are set to expire December 31, 2025, and absent Congressional action the program will revert to the ACA baseline: eligibility generally requires income between 100% and 400% FPL, so households with income above 400% FPL would typically lose premium tax credit eligibility for 2026 ^{[6] [4] [7]}. Reporting and briefs call this the “subsidy cliff” and warn many middle‑income households now receiving assistance could become ineligible overnight if the enhancement lapses ^{[5] [8]}.

3. How the “loss” actually works — mechanics and exceptions

Under pre‑ARPA rules the IRS disallowed the credit if household income exceeded 400% of the applicable FPL for the tax family; that rule would resume in 2026 if the enhancements expire ^[4]. There are important exceptions and interactions: state Medicaid expansion can make people under ~138% FPL ineligible for PTCs if they qualify for Medicaid, and lawfully present immigrants with incomes under 100% FPL have special rules noted in 2026 changes ^{[9] [4]}. Some sources also note transition rules or administrative relief proposals (e.g., hardship exemptions) being discussed for those “newly ineligible” in 2026 ^{[10] [9]}.

4. Financial impact that drives the policy debate: why the 400% cutoff matters

Analysts estimate major premium and out‑of‑pocket cost increases if enhanced credits lapse: KFF projects average marketplace premium payments could more than double in 2026, and others model steep cost increases for households just above the 400% line — a 60‑year‑old couple at 402% FPL could face premiums equal to a large share of income under the old cap ^{[11] [12]}. Policymakers argue over whether to extend enhancements, replace them with other approaches (HSAs, direct payments), or let the cliff return — all choices change who “loses” eligibility ^{[13] [12]}.

5. Practical takeaway for consumers and what sources recommend

For 2025 coverage: verify your household MAGI and note that the upper income cap does not apply this year — eligibility still requires being at least 100% FPL ^{[1] [2]}. For planning 2026 coverage: prepare for the likely return of the 100%–400% eligibility band if Congress does not act, and follow guidance from Marketplace/IRS tools and calculators to see how your estimated income compares to 2025 FPL figures used for 2026 eligibility ^{[4] [14] [15]}.

Limitations and competing views: Congressional and administration actions in late 2025 could change the picture; some Republican proposals would replace enhanced credits with targeted cash/HSAs rather than extend ARPA‑style rules, while others push for full extension — sources disagree on political feasibility and on the best policy tradeoffs ^{[13] [12]}. Available sources do not mention any definitive post‑2025 enactment that permanently abolishes either the 100% floor or the 400% cap — current reporting frames the 400% cutoff’s return as contingent on Congress not extending enhancements ^{[6] [4]}.