How to stay under 400% of the federal poverty level in 2026
The cliff is measured against your MAGI — modified adjusted gross income. Lower MAGI, and you can drop back under 400% and keep the subsidy. Here are the levers, roughly in order of impact.
Deductible retirement contributions
SEP-IRA or Solo 401(k) (self-employed) or a deductible traditional IRA cut MAGI dollar-for-dollar. If the calculator says you’re $4,900 over, a contribution at least that large can restore the whole subsidy.
HSA contributions (with a qualifying plan)
HSA contributions are above-the-line. Up to $4,300 single / $8,550 family for 2026 (+$1,000 catch-up at 55+), paired with a Bronze HSA plan.
Time your income
Early retirees especially can shift Roth conversions, capital gains, and IRA withdrawals between years to stay under the line in a subsidy year.
Business deductions (self-employed)
Legitimate deductions — home office, equipment (Section 179), health insurance itself — lower net self-employment income and MAGI.
Frequently asked
What income counts toward the 400% cliff?
ACA uses MAGI: adjusted gross income plus any tax-exempt interest, non-taxable Social Security, and excluded foreign income. Most people's MAGI is very close to their AGI.
Does going one dollar over really cost the whole subsidy?
Yes. For 2026 the enhanced credits expired, so above 400% of poverty there is no premium tax credit at all — a true cliff, not a gradual phase-out.
Talk to a licensed broker about your options
Free, no obligation. A broker can price your 2026 plans and the strategy moves for your exact situation.
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