Your Exact 2026 Subsidy Cliff Calculator (Plus the Numbers Nobody Else Will Give You)

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Last updated: January 2025

I just spent three hours on the phone with the marketplace, the IRS, and two insurance brokers trying to get one simple answer:

"What EXACTLY is my income limit for keeping health insurance subsidies in 2026?"

Nobody could give me a straight answer. They all said "around 400% of poverty level" or "it depends" or "check back later."

So I did the math myself. Every calculation. Every scenario. Every number you need.

Here it is. Your exact cliff number for 2026. No maybes. No "approximately." The exact dollar amount where your subsidies disappear.

Your 2026 Cliff Numbers (Based on 2025 FPL)

Single Person

Your cliff: $62,600

Make $62,600 = Keep subsidies
Make $62,601 = Lose everything

Married Couple

Your cliff: $84,600

Make $84,600 = Keep subsidies
Make $84,601 = Lose everything

Family of 3

Your cliff: $106,600

Make $106,600 = Keep subsidies
Make $106,601 = Lose everything

Family of 4

Your cliff: $128,600

Make $128,600 = Keep subsidies
Make $128,601 = Lose everything

Family of 5

Your cliff: $150,600

Make $150,600 = Keep subsidies
Make $150,601 = Lose everything

Write these numbers down. Screenshot them. Tattoo them on your forehead. Whatever it takes to remember them.

How to Calculate Your EXACT Income for the Cliff

This is where everyone screws up. The cliff is based on MAGI (Modified Adjusted Gross Income), not your gross revenue or take-home pay.

Step 1: Start with Gross Business Income

All revenue from your business, freelancing, consulting, etc.

Step 2: Subtract Business Expenses

Every legitimate business expense reduces your income:

Home office
Equipment
Software
Travel
Supplies
Professional services

Step 3: This Gives You Net Business Income

This goes on Schedule C of your taxes.

Step 4: Add Other Income

W-2 wages (if any)
Interest
Dividends
Capital gains
Rental income
Unemployment compensation

Step 5: Subtract "Above-the-Line" Deductions

These magical deductions reduce your income BEFORE the cliff calculation:

Half of self-employment tax
Self-employed health insurance premiums
Retirement contributions (SEP, Solo 401k, etc.)
HSA contributions
Student loan interest

Step 6: Add Back Certain Items

For ACA MAGI, you add back:

Tax-exempt interest
Untaxed foreign income
Non-taxable Social Security

Final Number = Your MAGI for Cliff Purposes

Real-World Calculation Example

Let me show you exactly how this works:

Sarah, Freelance Marketer in Jacksonville:

Gross Business Income: $95,000

Client payments: $95,000

Minus Business Expenses: -$23,000

Home office: $3,600
Computer/software: $2,400
Internet/phone: $1,800
Marketing: $2,000
Professional development: $1,200
Travel: $3,000
Office supplies: $1,000
Accounting/legal: $2,000
Other legitimate expenses: $6,000

Net Business Income: $72,000

Minus Half of Self-Employment Tax: -$5,089

SE tax is 15.3% of $72,000 = $11,016
Deductible portion = $5,508

Minus Retirement Contributions: -$10,000

Solo 401(k) contribution

Minus HSA Contribution: -$4,300

Annual HSA maximum for self-only

Adjusted Gross Income: $52,611

Plus Tax-Exempt Interest: +$200

Municipal bond interest

MAGI for ACA: $52,811

Result: She's $9,789 under the cliff. SAFE!

The Income Management Worksheet

Here's your planning template:

``` INCOME SOURCES: Business Revenue: $________ W-2 Income: $________ Interest/Dividends: $________ Other Income: $________ TOTAL GROSS: $________

BUSINESS DEDUCTIONS: Operating Expenses: -$________ Net Business Income: $________

ADJUSTMENTS: Half of SE Tax: -$________ Retirement Contributions: -$________ HSA Contributions: -$________ Health Insurance: -$________ PRELIMINARY AGI: $________

ADD-BACKS: Tax-Exempt Interest: +$________ FINAL MAGI: $________

CLIFF ANALYSIS: Your Cliff (from above): $________ Your MAGI: $________ Buffer/Danger: $________ ```

Monthly Tracking System

Don't wait until December to realize you're in trouble. Track monthly:

January-March (Q1)

Actual income: $______
Projected annual: Multiply by 4
Status: Safe/Caution/Danger

April-June (Q2)

YTD income: $______
Projected annual: Multiply by 2
Cliff buffer: $______

July-September (Q3)

YTD income: $______
Remaining safe income: $______
Action needed: Yes/No

October-December (Q4)

DANGER ZONE
Check weekly, not monthly
Stop work if within $2,000 of cliff

State-Specific Adjustments

If You Live in Alaska:

Single cliff: $78,240
Couple cliff: $105,720
(Alaska FPL is 25% higher)

If You Live in Hawaii:

Single cliff: $71,980
Couple cliff: $97,260
(Hawaii FPL is 15% higher)

If You Live in Non-Expansion States:

Also watch the BOTTOM cliff:

Florida: Must earn at least $15,650 (100% FPL)
Texas: Same
Georgia: Same
(No help if you earn too little)

The Danger Zones by Income

Safe Zone: $0-$45,000

Well below cliff
Maximum subsidies
Don't worry about cliff

Caution Zone: $45,001-$57,000

Getting closer to cliff
Start tracking carefully
Have retirement accounts ready

Danger Zone: $57,001-$61,000

High risk territory
Track income weekly
Max retirement contributions

Death Zone: $61,001-$62,600

One project away from disaster
Consider stopping work
Every dollar counts

Cliff Fall: $62,601+

No subsidies
Full repayment required
Financial disaster

Tools to Manage Your Number

The Retirement Contribution Calculator

If your projected MAGI is $67,000:

Over cliff by: $4,400
Solo 401(k) contribution needed: $4,400
New MAGI: $62,600
Status: SAVED!

The December Decision Tree

December 1st, your MAGI is $60,000:

Buffer: $2,600
Safe additional income: $2,000 max
Decision: Only take guaranteed payments

December 15th, your MAGI is $61,500:

Buffer: $1,100
Safe additional income: $500 max
Decision: STOP WORKING

Alternative If You're Near the Cliff

When you're playing this close to the edge, consider alternatives without cliffs. MyPhysicianPlan doesn't care if you make $62,000 or $65,000 - same price either way.

Why this matters:

No income calculations
No cliff to worry about
No repayment risk
Focus on growing your business, not limiting it

For someone dancing around the $62,600 cliff, the peace of mind alone might be worth it. Check out MyPhysicianPlan if you're tired of the income gymnastics.

Your Action Plan

Today:

Calculate your projected 2026 MAGI using the worksheet above

Write down your cliff number

Determine your buffer/danger amount

This Month:

Set up income tracking system

Open retirement accounts if needed

Plan maximum contribution capacity

By June 2025:

Know if you're in danger zone

Adjust business plans accordingly

Research alternatives if needed

October 2025:

Make final 2026 income projection

Estimate conservatively for marketplace

Have backup plan ready

Throughout 2026:

Track MAGI monthly

Update projections quarterly

Take action if approaching cliff

Don't wait until December

The Numbers Nobody Wants You to Know

Average subsidy lost at cliff: $11,479/year Effective tax rate on $1 over cliff: 1,147,900% Percentage of people who know their cliff number: <5% Percentage who track MAGI properly: <2% Cost of not knowing: Everything

Your Homework

Right now, before you read another article:

Write down your 2026 cliff number

Calculate your projected 2026 MAGI

Determine your buffer amount

Set a monthly reminder to track

If you can't answer "What's my exact MAGI today?" you're flying blind toward a cliff.

The Bottom Line

The subsidy cliff isn't some vague threat. It's a specific number. A precise dollar amount. A exact line you cannot cross.

Now you know your number. Not "around" your number. Not "approximately" your number. Your EXACT number.

$62,600 for single. $84,600 for married. Not $62,601. Not $84,601.

One dollar makes the difference between affordable healthcare and financial ruin.

Know your number. Track your number. Stay under your number.

Or consider MyPhysicianPlan and stop worrying about numbers altogether.

Your financial future depends on math, not hope. Now you have the math.

Use it.

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Note: Calculations based on 2025 Federal Poverty Level guidelines which determine 2026 subsidies. Final 2026 FPL numbers will be published in January 2026 but are typically within 2-3% of projections.