2026 Premium Tax Credit
For 2026, the Premium Tax Credit figures are 2.1% (Lowest applicable percentage) and 9.96% (Highest applicable percentage).
Effective 2026-01-01Source: Rev. Proc. 2025-25 (IRS)Verified 2026-09-03
Compared with 2025
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Lowest applicable percentage | 0% | 2.1% | +2.1% |
| Highest applicable percentage | 8.5% | 9.96% | +1.46% (+17.2%) |
Who it applies to
Anyone claiming the premium tax credit for a taxable year beginning in 2026 uses this table. Household income as a share of the Federal poverty line picks the band, and the band's applicable percentage is the share of household income the taxpayer is expected to contribute towards the benchmark plan; the credit covers the rest of that premium. The expected contribution is 2.1% at the bottom of the schedule and 9.96% in the highest band the table covers. The table states no percentage above that band, so household income beyond it produces no credit, which is a change from the 8.5% open ended top band that applied for 2025.
What changed this year, and why
For taxable years beginning in 2026 the applicable percentage table under § 36B is indexed again, and both the bands and the figures change. The 2025 table, fixed by statute, ran from 0% in its lowest band to 8.5% in a top band with no upper income limit. The 2026 table runs from 2.1% in its lowest band to 9.96% in the highest band it covers, and that top band has an upper income limit again. Rev. Proc. 2025-25 also records a change of method: for 2025 and a number of years before it the rate of premium growth was based on per enrollee spending for employer-sponsored insurance in the National Health Expenditure Account, and from 2026 guidance from the Department of Health and Human Services provides a new measure that also captures increases in individual market premiums.
Common questions
- What is the premium tax credit applicable percentage for 2026?
- For taxable years beginning in 2026 the applicable percentage table under § 36B starts at 2.1% in the lowest household income band and reaches 9.96% in the highest band the table covers. Above that band the table states no percentage.
- How did the applicable percentage table change from 2025 to 2026?
- Completely. For 2025 the table was the fixed one running from 0% to 8.5% with an open ended top band. For 2026 the indexed table returns, running from 2.1% to 9.96%, on different income bands and with an upper income limit on the top band.
- Does the premium tax credit still have an income cliff in 2026?
- The 2026 table covers bands up to a stated multiple of the Federal poverty line and states no applicable percentage above the highest of them, so household income beyond that band produces no credit. For 2025 the top band had no upper income limit.
- Why did the percentages rise so much for 2026?
- Two things happened at once. The statutory table that held the figures down through 2025 no longer applies, so the indexed table returns, and Rev. Proc. 2025-25 also adopts a new premium growth measure from the Department of Health and Human Services that captures increases in individual market premiums as well as employer-sponsored premiums.
- Is this the same as the ACA affordability percentage?
- No. Rev. Proc. 2025-25 states both, but they answer different questions. The applicable percentage table sizes the premium tax credit itself. The required contribution percentage decides only whether an offer of employer-sponsored coverage counts as affordable.
- Where is the 2026 table published?
- In Rev. Proc. 2025-25, issued by the IRS, which provides the indexing adjustments to the applicable percentage table in § 36B for taxable years beginning in calendar year 2026.
Who counts as an applicable taxpayer
You must file Form 8962 with your income tax return if you are taking the premium tax credit, if advance payments of the credit were made for anyone in your tax family, or if advance payments were made for someone you told the Marketplace would be in your tax family and no one included that person in a tax family. Filing the form reconciles the advance amounts the government sent to your insurer with the credit you actually qualify for based on your final household income and family size for the year. Even if you think you were not eligible for the credit, the return is required whenever advance payments were made so the excess can be repaid. The form attaches to Form 1040, 1040-SR, or 1040-NR.
You must file Form 8962 with your income tax return (Form 1040, 1040-SR, or 1040-NR) if any of the following apply to you. • You are taking the PTC. • APTC was paid for you or another individual in your tax family. • APTC was paid for an individual you told the Marketplace would be in your tax family and neither you nor anyone else included that individual in a tax family.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
Household income is not the same as your AGI
For the premium tax credit, household income is the modified adjusted gross income of you and your spouse (if filing jointly) plus the modified AGI of each dependent who must file a return because their income meets the filing threshold. It does not include the modified AGI of dependents who file only to claim a refund of withheld tax. Modified AGI is the AGI on your return plus certain untaxed amounts: foreign earned income, tax-exempt interest, and the non-taxable portion of social security benefits. This definition is broader than the adjusted gross income shown on your tax return, so two taxpayers with the same AGI can have different household income figures if one has tax-exempt interest or non-taxable social security. The percentage of the benchmark plan premium you are expected to pay, called the applicable percentage, ranges from 2.1% to 9.96% of household income for 2026. Credit eligibility and amount depend on this household income number, not the AGI alone.
Household income. For purposes of the PTC, household income is the modified adjusted gross income (modified AGI) of you and your spouse (if filing a joint return) (see Line 2a, later) plus the modified AGI of each individual whom you claim as a dependent and who is required to file an income tax return because their income meets the income tax return filing threshold (see Line 2b, later). Household income does not include the modified AGI of those individuals whom you claim as dependents and who are filing a 2025 return only to claim a refund of withheld income tax or estimated tax.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
The second lowest cost silver plan sets the credit
The applicable SLCSP premium is the premium for the second lowest cost silver plan offered through the Marketplace where you live that applies to your coverage family. This amount, not your actual enrollment premium, is the benchmark used to calculate the premium tax credit. The credit is designed to cover the difference between what you are expected to contribute toward premiums, based on your household income and the applicable percentage, and the cost of this benchmark plan. If you enrolled in a plan that costs more than the SLCSP, you pay the extra amount out of pocket. If you enrolled in a cheaper plan, your credit is limited to the benchmark cost minus your required contribution. Form 1095-A, Part III, column B, generally reports this amount, though it may be incorrect if your circumstances changed during the year or if no advance payments were made. The applicable percentage used in the calculation ranges from 2.1% to 9.96% of household income for 2026.
Applicable SLCSP premium. The applicable SLCSP premium is the second lowest cost silver plan premium offered through the Marketplace where you reside that applies to your coverage family (described earlier).
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
OBBBA removed the income-based cap on paying back advance credit
Section 71305 of the One, Big, Beautiful Bill Act removed § 36B(f)(2)(B) from the tax code, effective for tax years beginning after December 31, 2025. That subsection used to cap how much excess advance premium tax credit a lower-income household had to repay when its actual income came in higher than it estimated when it enrolled. For 2026 there is no such cap: if you received more advance payments of the premium tax credit than you turn out to be entitled to, you repay the full excess amount when you reconcile on Form 8962, no matter how low your household income is.
Section 71305 of the OBBBA removes § 36B(f)(2)(B), which limited the tax increase from excess advance payments for certain households, effective for taxable years beginning after December 31, 2025.
Rev. Proc. 2025-32 (IRS)
Filing separately usually disqualifies you
If you are considered married for federal income tax purposes, you must file a joint return with your spouse to take the premium tax credit unless you qualify for an exception. The general rule disqualifies married taxpayers who file separate returns from claiming the credit. An exception exists for certain married persons living apart who meet the requirements to file as head of household. Another exception covers victims of domestic abuse or spousal abandonment who are living apart from their spouse and cannot file jointly; these taxpayers may file as married filing separately and still claim the credit if they certify their status on Form 8962. Without meeting an exception, married taxpayers who file separate returns are not applicable taxpayers and cannot take the credit; any advance payments made on their behalf must be repaid, subject to the repayment limitation. The applicable percentage used to figure the credit, which ranges from 2.1% to 9.96% of household income for 2026, is computed on a joint-return basis for married couples who file together.
Married taxpayers. If you are considered married for federal income tax purposes, you must file a joint return with your spouse to take the PTC unless one of the two exceptions below applies to you.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
A change in income or family should be reported right away, not held for tax time
If your income or family size changes during 2026, you should report the change to the Marketplace right away rather than waiting until you file your tax return. Prompt reporting lets the Marketplace adjust your advance payments of the premium tax credit (APTC) so they match what you will actually be entitled to when you reconcile at year end. If you do not report a change, you may receive too much or too little APTC during the year. Too much APTC means you will have to repay the excess when you file your return; too little means you missed out on help with premiums you could have received each month. Reporting changes when you re-enroll and again during the year keeps your coverage costs in line with your actual circumstances.
Report changes in circumstances when you re-enroll in coverage and during the year. If advance payment of the premium tax credit (APTC) is being paid for an individual in your tax family (described later) and you have had certain changes in circumstances (see the examples later), it is important that you report them to the Marketplace where you enrolled in coverage.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
APTC forces a return even when your income wouldn't otherwise require one
Taxpayers who received advance payments of the premium tax credit (APTC) must file a federal income tax return and attach Form 8962 to reconcile those payments, even if their income is so low that they would not otherwise be required to file a return. This filing requirement applies regardless of how little income you earned during the year. The return must be filed on Form 1040, 1040-SR, or 1040-NR; Form 1040-SS cannot be used if you are filing Form 8962. The purpose of this requirement is to ensure that the amount of APTC paid on your behalf during the year is compared to the actual premium tax credit you are entitled to based on your final income and family size. If APTC exceeded your allowable credit, you must repay the excess; if your allowable credit exceeded the APTC paid, you receive the difference as a refundable credit. This reconciliation process is mandatory for anyone who had APTC paid for themselves or any member of their tax family.
If any of the circumstances above apply to you, you must file an income tax return and attach Form 8962 even if you are not otherwise required to file. You must use Form 1040, 1040-SR, or 1040-NR.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
An affordable QSEHRA from your employer can wipe out the credit for that month
If your employer offers a qualified small employer health reimbursement arrangement (QSEHRA) and that arrangement is considered affordable for a given month in 2026, you are not allowed any premium tax credit for that month. The employer reports the annual permitted benefit in box 12 of your Form W-2 with code FF. When the QSEHRA is affordable, the full monthly permitted benefit is treated as covering your premium costs for that month, so no PTC is available. If the QSEHRA is unaffordable for a month, you may still claim a PTC but must reduce the monthly amount by the monthly permitted benefit.
If you were covered under a QSEHRA, your employer should have reported the annual permitted benefit in box 12 of your Form W-2 with code FF. If the QSEHRA is affordable for a month, no PTC is allowed for the month.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
A wrong benchmark premium on your Form 1095-A does not excuse using it
When you prepare your 2026 return, you generally use the second-lowest-cost silver plan (SLCSP) premium from Form 1095-A to figure your premium tax credit. However, if you have reason to believe the Marketplace reported the wrong applicable SLCSP premium on that form, you cannot simply use the figure shown. You must determine the correct applicable SLCSP premium for every month of the year. If the correct premium differs from month to month, you must check "No" on the SLCSP line and complete lines 12 through 23 of Form 8962 to enter the proper amount for each month. Relying on a clearly incorrect number from the form will produce a wrong credit figure.
If either of these two situations applies to you, or if you have reason to believe the Marketplace reported the wrong applicable SLCSP premium, you must determine the correct applicable SLCSP premium for every month.
2025 Instructions for Form 8962, Premium Tax Credit (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2025-25 (IRS)
- Lowest applicable percentage
Initial percentage Final percentage Less than 133% 2.10% 2.10%
- Highest applicable percentage
At least 300% but not more than 400% 9.96% 9.96%