400% Federal Poverty Level (FPL) Subsidy Cliff

Tax Credits to lower health insurance premium costs are generally available to anyone making 100% – 400% of the Federal Poverty Level. The 400% cut-off creates a “Subsidy Cliff”, meaning that families who make just slightly more than the limit can lose all assistance, resulting in a loss of thousands in potential savings by earning only a small amount more.

To provide relief, the 400% Federal Poverty Level (FPL) Subsidy Cliff was temporarily removed by the American Rescue Plan and extended through 2025 by the Inflation Reduction Act.

Now, through 2025, individuals and families making over 400% FPL will see a gradual decrease in tax credits as their taxable income increases, rather than losing all assistance at once.