Tax Planning
How to Leverage Premium Tax Credit Updates in Your 2026 ACA Planning
Major indexing changes to the Applicable Percentage Table effective in 2026 will affect Premium Tax Credit eligibility and employer affordability thresholds; planning early can save money.
By NomadicTax Research Team • 5-8 min read • November 22, 2025
## What’s changing in 2026
The IRS recently published **Revenue Procedure 2025-25**, which adjusts the **Applicable Percentage Table (APT)** for Premium Tax Credit (PTC) eligibility, and modifies the **Required Contribution Percentage (RCP)** used in determining if employer-sponsored coverage is “affordable.”([irs.gov](https://www.irs.gov/irb/2025-32_IRB?utm_source=openai))
Key updates include:
- A switch in the **premium growth measure** to include both individual market premiums and employer-sponsored insurance premiums, as directed by HHS’s Marketplace Integrity & Affordability rule.([irs.gov](https://www.irs.gov/irb/2025-32_IRB?utm_source=openai))
- New income-based percentages affecting credit calculations:
| Income vs FPL | Initial % | Final % |
|---|---|---|
| < 133% | 2.10% | 2.10% |
| 133-150% | 3.14% | 4.19% |
| 150-200% | 4.19% | 6.60% |
| 200-250% | 6.60% | 8.44% |
| 250-300% | 8.44% | 9.96% |
| 300-400% | 9.96% | 9.96% |
- The **Required Contribution Percentage** jumps to **9.96%** for plan years beginning in 2026.([irs.gov](https://www.irs.gov/irb/2025-32_IRB?utm_source=openai))
## Practical Tax Planning Considerations
### Individuals & Marketplace Coverage Seekers
- **Estimate your household income carefully**: Since the contribution percentages increase by income band, small income changes that place you in a higher band could significantly increase your expected premium contribution.
- **Act before 2026 if possible**: If your 2025 income is lower, or your health plan options are more affordable then, you may benefit from current lower thresholds.
### Employers & Applicable Large Employers (ALEs)
- **Revise affordability calculations**: The affordability safe harbor for employer coverage will now rely on the higher RCP, meaning some plans previously “affordable” may no longer meet the standard.
- **Act on offers vs full-time employees**: To avoid penalties under ACA’s employer shared responsibility rules, ensure at least 95% of full-time employees (and their dependents) are offered minimum essential coverage that meets both minimum value and affordability. Misjudging the new RCP could lead to unexpected ESRP liabilities.([irs.gov](https://www.irs.gov/affordable-care-act/employers/determining-if-an-employer-is-an-applicable-large-employer?utm_source=openai))
### Example Scenario
**Case study:** Ann is a single filer with household income equal to 180% of the Federal Poverty Line (FPL). Under the previous table, her expected contribution might have been closer to **4–5%** of income. Beginning in 2026, that jumps to **6.60%**. If her income is $30,000, that’s an increase of about $660/year, or $55/month. This might make a Marketplace plan less viable—she’ll want to assess employer coverage if it’s available and meets affordability.
## Action Steps to Take Now
1. **Assess your 2025 health plan costs** vs what 2026 could require under higher contribution thresholds.
2. **Employers**: Review your plan affordability using 2026 standards, and consider adjusting plan design or employee contributions accordingly.
3. **Individuals**: If eligible, time application for Marketplace plans or consider reducing income (where possible) through retirement contributions or other adjustments to stay in a lower band.
4. **Consult with a tax professional**: Especially for complicated situations like multiple income sources or shared coverage, being proactive now saves surprises.
**Bottom line**: The new 2026 rules raise what you’re expected to contribute for health coverage, both for individuals and employers. Understanding the shifts now means you can plan your income, coverage, or employer-offering to minimize unexpected costs.