For the first time in years, many Americans enrolled in a health insurance plan via the Affordable Care Act marketplace will need to keep a careful accounting of their annual income — or risk a hefty federal tax bill.
Enhanced ACA subsidies lapsed at the end of 2025, leaving millions of households on the hook for higher insurance premiums. The lapse also reintroduced the so-called subsidy cliff, whereby households that earn even $1 more than a specific income threshold will lose all eligibility for subsidies, also known as premium tax credits.
That income cutoff, which varies by family size, is $62,600 for a single person, $84,600 for a two-person household and $128,600 for a family of four in 2026, for example.
More than 2 million people enrolled in an ACA marketplace plan have an income near the subsidy cliff. ACA enrollees also tend to have relatively volatile incomes, making it hard to predict their annual earnings, experts said.
Households over the limit would have to pay back any federal subsidies they received for premiums — potentially worth thousands of dollars — when they file taxes next year for 2026.
