Solve for the contribution that puts you back under 400% FPL
Data verified: Aug 2026 · Source: HHS ASPE 2025 Poverty Guidelines
An ACA MAGI calculator for the reverse problem: exactly how much to contribute pre-tax to get back under the 400% federal poverty level cliff.
Your details
If you are covered, the traditional IRA deduction phases out at higher incomes.
Total value of getting under the cliff
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How to get there
✓You are already under the 400% FPL cliff with — to spare. Your credit is worth about — a year — protect it by keeping MAGI below —.
⚠Your available pre-tax room falls — short of the cliff. You would need another lever — a lower-income year, a business deduction, or a spouse's plan — to close the gap.
⚠Your traditional IRA deduction is reduced or eliminated because you are covered by a workplace plan at this income. Only the deductible portion reduces MAGI, so it is counted at — here.
Credit recovered vs. contribution
Contribution
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How this is calculated
Above 400% of the federal poverty level the premium tax credit vanishes entirely. That makes the last few thousand dollars of income wildly expensive — and it makes a pre-tax contribution that pushes you back under the line one of the highest-return moves available to a household.
This tool finds the gap between your MAGI and the cliff, then fills it from the levers that actually reduce MAGI, in order of value: the HSA first (deductible going in, tax-free coming out for medical costs), then the 401(k), then a traditional IRA if it is still deductible for you.
Formula
needed = MAGI − 4.00 × FPL[state][household size]
allocate needed across { HSA, 401(k), traditional IRA }
respecting each limit and eligibility rule
value = credit regained + (deductible contribution × marginal rate)
2026 limits: 401(k) elective deferral $24,500 plus $8,000 catch-up at 50 or $11,250 at ages 60–63; traditional IRA $7,500 plus $1,100 catch-up; HSA $4,400 self-only or $8,750 family, plus $1,000 from age 55.
Worked example
A single filer with MAGI of $64,000 in the 48 contiguous states, benchmark premium $9,600.
400% FPL cliff for a household of one$62,600
Amount over the cliff$1,400
Contribution needed (traditional 401(k))$1,400
Income tax saved at 22%$308
Credit regained plus tax savedSeveral thousand dollars
What actually reduces ACA MAGI
Only above-the-line items work. Traditional 401(k) and 403(b) deferrals, deductible traditional IRA contributions, HSA contributions, the deductible half of self-employment tax, and self-employed health insurance premiums all reduce it.
A Roth contribution does not reduce MAGI — it is made with after-tax money.
Itemized deductions do not reduce MAGI, because MAGI is built from AGI, which sits above them.
Tax-exempt municipal bond interest is added back for ACA purposes, so it does not help either.
Deadlines differ by lever
HSA and traditional IRA contributions can normally be made up to the filing deadline of the following April and still be attributed to the prior tax year, which means you can fix a cliff problem after the year has closed. A 401(k) deferral cannot — it has to run through payroll before 31 December.
Frequently asked questions
Why is a small contribution worth so much?
Because the cliff is all or nothing. The contribution does not buy a proportionally larger credit; it restores the entire credit, which for a family can easily be five figures. The return on the last dollar contributed is effectively unbounded, which makes this one of the highest-value financial moves available to a household near the threshold.
Should I use the HSA or the 401(k) first?
The HSA, if you are eligible for one. It is the only account that is deductible going in, grows tax-free, and comes out tax-free for qualified medical expenses, so it is never taxed at any stage. The 401(k) is deductible going in but fully taxable coming out, which makes it the second choice.
Can I still deduct a traditional IRA contribution?
It depends on workplace coverage. If neither you nor your spouse is covered by an employer plan, the contribution is fully deductible at any income. If you are covered, the deduction phases out between $81,000 and $91,000 of MAGI for single filers and $129,000 to $149,000 for joint filers in 2026.
What if I cannot get under the cliff?
Then the contribution still saves income tax at your marginal rate, but it does not buy back the credit. In that case there is no reason to hit an exact target number, so contribute whatever makes sense on its own merits rather than straining to reach a threshold you cannot actually clear.
Does this work for a self-employed person?
Yes, and usually better. A solo 401(k) allows both employee deferrals and employer contributions, so the total room available to reduce MAGI is considerably larger than for an employee. Self-employed health insurance premiums and the deductible half of self-employment tax also reduce MAGI before you contribute anything.
HHS ASPE 2025 Poverty Guidelines · IRS Rev. Proc. 2025-25 · IRS Notice 2025-67 · IRS Rev. Proc. 2025-19 · IRS Notice 2026-05 · IRS Rev. Proc. 2025-32 · SSA Contribution & Benefit Base
Disclaimer
Estimates for general information only, not tax or insurance advice. Contribution eligibility depends on your plan documents and coverage, and the traditional IRA deduction phaseout is evaluated on your final MAGI. Consult a qualified professional.