You Make the Call - July 31, 2025

Question: Jan and Mark Hall, a married couple living in Michigan with no dependents, filed jointly in 2025. One spouse received advance premium tax credits (APTC) through the Health Insurance Marketplace, and neither was enrolled in employer-provided coverage. Their modified adjusted gross income (MAGI) for 2025 was $150,000, and they paid $14,500 in health insurance premiums by year-end. If all circumstances remain the same in 2026, will they continue to qualify for premium tax credit (PTC) subsidies?

Answer: No. Starting in 2026, Jan and Mark will no longer be eligible for the PTC subsidies.
Under current law, effective through tax year 2025, taxpayers are allowed to receive subsidies if premiums exceed 8.5% of total income. The historical standard for eligibility was that income must exceed 400% of the federal poverty level (FPL), which is a much lower threshold.

The impact of the change can be seen in this calculation:

The Hall’s 2025 MAGI of $150,000 falls below the 8.5% existing standard.
($150,000 x 8.5% = $12,750)

Because their premiums of $14,500 exceeded $12,750, they were
eligible for the PTC.

The income-based exception beginning Jan. 1, 2026, enacted by the American Rescue Plan Act, no longer applies. Taxpayers with MAGI above 400% of the FPL will no longer be eligible for subsidies, regardless of their premium burden.

Using 2025 values for 2026 illustration:

The 2025 FPL for a household of two in Michigan is $19,720

400% of FPL income cap: $19,720 x 400% = $78,880

Jan and Mark’s income of $150,000 exceeds the restored income cap. They are ineligible for the PTC in 2026.