Self-employed and on Obamacare: how to avoid a surprise repayment

Updated November 2026

Freelancers, contractors, and gig workers are the most likely to repay subsidy at tax time, because their income is hard to predict when they enroll. Starting with 2026, there is no cap on that repayment.

What counts as your income

For the premium tax credit, self-employment income is your net profit (Schedule C), not your gross receipts. Business expenses reduce it, and so does the deduction for half of your self-employment tax.

Deductions that lower the income used for your subsidy

• Self-employed health insurance deduction: premiums you paid for months you were not eligible for a subsidized employer plan (including through a spouse). Because it interacts with the credit, it requires a special calculation; many people skip it and overstate their income.
• SEP-IRA: roughly 20% of net self-employment earnings, up to $72,000 for 2026, deductible until your filing deadline including extensions.
• Traditional IRA and HSA contributions made by April 15, 2027.

During the year

Track your income monthly and update your Marketplace application whenever your expected annual income changes. Updating early adjusts your advance payments for the remaining months and reduces what you could owe at tax time.

Related guides

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