rp-25-25.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.105: Examination of returns and claims for refund, credit, or abatement;
determination of correct tax liability.
(Also Part 1, §§ 36B, 1.36B-2, 1.36B-3.)

Rev. Proc. 2025-25

SECTION 1. PURPOSE

This revenue procedure provides indexing adjustments to the applicable
percentage table (Applicable Percentage Table) in § 36B(b)(3)(A)(i) of the Internal
Revenue Code (Code)
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for taxable years beginning in calendar year 2026. This table is
used to calculate an individual’s premium tax credit under § 36B. This revenue
procedure also provides the indexing adjustment for the required contribution
percentage (Required Contribution Percentage) in § 36B(c)(2)(C)(i)(II) for plan years
beginning in calendar year 2026. This percentage is used to determine whether an
individual is eligible for affordable employer-sponsored minimum essential coverage
under § 36B.

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Unless otherwise specified, all “section” or “§” references are to sections of the Code or the Income Tax
Regulations (26 CFR part 1).

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For plan years beginning in calendar year 2026, the Applicable Percentage Table
and the Section 36B Required Contribution Percentage indexing adjustments are based
on the most recent projections of premium growth and income growth.
2
See §§ 1.36B-
2(c)(3)(v)(C) and 1.36B-3(g). In addition, the additional adjustment provided in
§ 36B(b)(3)(A)(ii)(II) is not required for plan years beginning in 2026 because the
Department of the Treasury (Treasury Department) and the Internal Revenue Service
(IRS) have determined that the failsafe exception described in § 36B(b)(3)(A)(ii)(III)
applies for plan years beginning in calendar year 2026.
SECTION 2. CHANGE TO PREMIUM GROWTH ADJUSTMENT METHODOLOGY
The Applicable Percentage Table and the Section 36B Required Contribution
Percentage indexing adjustments are computed using the methodology described in
section 4 of Rev. Proc. 2014-37, 2014-2 C.B. 363, and in guidance issued by the
Department of Health and Human Services (HHS). For 2025 and a number of years
prior to 2025, the rate of premium growth was based on per enrollee spending for
employer-sponsored insurance as published in the National Health Expenditure
Account. However, beginning in calendar year 2026, HHS guidance provides a new
premium growth measure that captures increases in individual market premiums in
addition to increases in employer-sponsored insurance premiums for purposes of
calculating the premium adjustment percentage for the 2026 benefit year and beyond.
See HHS Marketplace Integrity and Affordability rule, 90 Fed. Reg. 27074 (June 25,
2025). The Treasury Department and the IRS adopt the new premium growth measure

2
The rate of premium growth and the rate of income growth are calculated using the NHEA Projections,
2024-2033, available at:
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-
and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected.

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provided in the 2026 HHS Marketplace Integrity and Affordability rule for purposes of
the Applicable Percentage Table and the Section 36B Required Contribution
Percentage indexing adjustments.
SECTION 3. ADJUSTED ITEMS

.01 Applicable Percentage Table for 2026. For taxable years beginning in
calendar year 2026, the Applicable Percentage Table for purposes of § 36B(b)(3)(A)(i)
and § 1.36B-3(g) is:
Household income percentage of Federal
poverty line:
Initial percentage Final percentage
Less than 133% 2.10% 2.10%
At least 133% but less than 150% 3.14% 4.19%
At least 150% but less than 200% 4.19% 6.60%
At least 200% but less than 250% 6.60% 8.44%
At least 250% but less than 300% 8.44% 9.96%
At least 300% but not more than 400% 9.96% 9.96%

.02 Required Contribution Percentage for 2026. For plan years beginning in
calendar year 2026, the Required Contribution Percentage for purposes of
§ 36B(c)(2)(C)(i)(II) and § 1.36B-2(c)(3)(v)(C) is 9.96%.
SECTION 4. EFFECT ON OTHER DOCUMENTS
Rev. Proc. 2014-37 is supplemented.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective for taxable years and plan years beginning in
calendar year 2026.
SECTION 6. DRAFTING INFORMATION

The principal author of this revenue procedure is Clara L. Raymond of the Office
of Associate Chief Counsel (Income Tax and Accounting). For further information

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regarding this revenue procedure, contact Ms. Raymond at (202) 317-4718 (not a toll-
free call).