How to lower your income for the premium tax credit

Updated November 2026

Your Obamacare subsidy is based on modified adjusted gross income (MAGI). Several deductions reduce it, and some can still be made for 2026 after the year ends. Lower MAGI can mean a smaller repayment, and if you are just over 400% of the poverty line, it can restore your eligibility entirely.

Traditional IRA contributions

For 2026, you can contribute up to $7,500 ($8,600 if you are 50 or older) until April 15, 2027. The deduction can be limited if you or your spouse were covered by a retirement plan at work and your income is above certain levels.

HSA contributions

If you had an HSA-eligible health plan, you can contribute up to $4,400 for self-only coverage or $8,750 for family coverage for 2026, plus $1,000 if you are 55 or older, until April 15, 2027. Starting in 2026, Marketplace Bronze and Catastrophic plans are treated as HSA-eligible. Limits are prorated for months you were not covered.

SEP-IRA contributions (self-employed)

Self-employed people can contribute roughly 20% of net self-employment earnings, up to $72,000 for 2026, until their tax filing deadline, including extensions.

Self-employed health insurance deduction

If you were self-employed and paid your own premiums, you can deduct the premiums you paid for months you were not eligible for a subsidized employer plan. Because this deduction and the credit affect each other, the calculation is circular; our estimate solves for both.

A note on cash flow

Money contributed to an IRA or HSA remains yours, but withdrawing it early can trigger taxes and penalties. Confirm your plan with a tax professional before making large contributions.

Related guides

This guide is general information, not tax advice. Clawback Check is not affiliated with HealthCare.gov, any state Marketplace, or the IRS.