The IRS published the applicable percentage table for the 2027 premium tax credit in July, and the table’s last row ends at 400 percent of the federal poverty line (Rev. Proc. 2026-26). Above that line there is no next row, which means there is no credit, not a smaller one. Open enrollment for 2027 coverage opens November 1, so the number that decides this is your projected 2027 income, and you are being asked for it two months from now.
Tax Disclaimer: This article covers the tax mechanics of a federal income tax credit and is for informational purposes only. It is not tax, legal, financial or insurance advice, and it does not recommend any health plan or coverage decision. Consult a qualified professional regarding your specific situation.
What the IRS Actually Published
The premium tax credit works by capping what you are expected to contribute toward a benchmark plan at a set share of your household income. That share is the “applicable percentage,” and the IRS re-indexes it every year.
For 2027 the schedule runs from 2.15% of income at the bottom of the range up to 10.22% at the top, with the tiers stepping through 133%, 150%, 200%, 250% and 300% of the federal poverty line (Rev. Proc. 2026-26). The final tier, covering household income at least 300% but not more than 400% of the poverty line, is flat: 10.22% going in and 10.22% coming out (Rev. Proc. 2026-26). The revenue procedure is effective for taxable years and plan years beginning in calendar year 2027.
Flat matters. Everywhere else on the schedule, earning a little more raises your expected contribution gradually, so the credit shrinks gradually. In the top tier it stops adjusting, and then the table simply ends.
Why This Is Back
For tax years 2021 through 2025, Congress removed the income ceiling entirely. In the IRS’s own words, it “temporarily expanded eligibility for the Premium Tax Credit by eliminating the requirement that a taxpayer’s household income may not be more than 400 percent of the federal poverty line” (IRS, Questions and answers on the Premium Tax Credit).
The standing rule underneath that expansion never went away. The same IRS page states it plainly: eligibility runs where “household income for the year is at least 100 percent but no more than 400 percent of the federal poverty line for their family size” (IRS).
A table published in July 2026 that stops at 400 percent is the clearest available statement of what is scheduled to apply in 2027.
Where the Line Sits in Dollars
The percentage is not the number you can act on. The dollar figure is, and it comes from a different agency.
The 2026 HHS poverty guidelines for the 48 contiguous states and the District of Columbia set the annual figure at $15,960 for a household of one, $21,640 for two, $27,320 for three and $33,000 for four, adding $5,680 for each additional person (HHS, Federal Register Vol. 91 No. 10, January 15, 2026).
Multiply each by four and the ceiling stops being abstract:
| Household size | 400% of the 2026 poverty guideline |
|---|---|
| 1 | $63,840 |
| 2 | $86,560 |
| 3 | $109,280 |
| 4 | $132,000 |
Those are the lines a 2027 household income has to stay under, on the guidelines currently published.
Why the 2026 Guidelines and Not 2027’s
This trips people who try to work it out themselves. The credit for a coverage year is computed against the prior year’s poverty guidelines, because those are the figures in effect when the enrollment period opens.
The IRS states the rule directly in the Form 8962 instructions, which for 2025 coverage say “the 2024 federal poverty lines are used for this purpose” (IRS, Instructions for Form 8962). Carry that forward and 2027 coverage runs on the guidelines published in January 2026, which are the ones in the table above. Guidelines published in January 2027 will not change your 2027 credit.
The Part That Is Not Settled
Legislation has been moving on this all year, and none of it has changed the published schedule.
The House passed a three-year extension of the expanded credits in January 2026 (CBS News, Ballotpedia). The Senate has not enacted a matching extension, and the IRS issued an applicable percentage table capped at 400 percent six months later.
That is the honest state of it: a bill exists, and the tax rules as published assume it does not pass. Plan against the published rules. If an extension is enacted before November, the worst outcome of having planned this way is that you were more careful with your income projection than you needed to be.
The Levers That Actually Move the Number
Household income for this credit is modified adjusted gross income, which is adjusted gross income with a few add-backs. Anything that reduces AGI reduces it, and the deductions that sit above the AGI line are the ones that work.
For a self-employed household near the ceiling, the largest single lever is a retirement contribution. A SEP-IRA or a Solo 401(k) contribution is deducted on Schedule 1, which is above the line, so it reduces AGI directly rather than competing with the standard deduction of $16,100 for a single filer or $32,200 for a couple filing jointly. Size one in the Solo 401(k) and SEP calculator, and read what October 15 still leaves open if you have an extended prior-year return sitting there too.
Health savings account contributions work the same way, above the line, and the 2027 figures were published in a separate revenue procedure. We covered those in the 2027 HSA numbers.
The timing lever is real too. Income you control the date of, such as an invoice you could send in December or January, or a gain you could realise in either year, is worth positioning deliberately when a household sits within a few thousand dollars of the ceiling. If that income is self-employment income, size the tax on it in the 1099 tax estimator before you decide which year it lands in.
What To Do Before November 1
Work out your household size, find your line in the table above, and build a genuine 2027 income projection rather than reusing this year’s figure. Then decide how confident that projection is.
If you land comfortably under, take the advance credit as normal. If you land within a few thousand dollars of the ceiling and your income is variable, the cautious move is to take less advance credit during the year than you appear to qualify for, and to reconcile the difference on Form 8962 when you file. Ending the year over the line after taking a full year of advance payments is a reconciliation problem; ending it over the line having taken little or none is not.
The Bottom Line
The 2027 applicable percentage table ends at 400 percent of the federal poverty line (Rev. Proc. 2026-26), and the dollar value of that line is set by guidelines already published.
For a household of one that is a number you can write down today. Project your 2027 income against it before open enrollment opens on November 1, use the above-the-line deductions if you are close, and take the advance credit conservatively if your income is the kind that surprises you in December.
