This ACA subsidy cliff calculator estimates your modified adjusted gross income (MAGI) as a freelancer. It then shows how close you are to the 400% federal poverty line. For 2027 coverage, that line is $63,840 for a single person. Go above it, and you get no premium tax credit. Enter your numbers below, and the results update as you type.
ACA Subsidy Cliff Calculator for the Self-Employed
Estimate your MAGI and see how close you are to the 400% federal poverty line. The numbers below are examples, so replace them with yours.
How to Use the Calculator
- Pick your coverage year and household size.
- Enter your expected net profit, which is revenue minus business expenses.
- Add any other income in your tax household, such as a spouse's wages.
- Enter retirement or HSA contributions you will actually make.
- Read the result, then test a stronger year in the scenario table.
What Counts Toward Your MAGI
HealthCare.gov defines MAGI as adjusted gross income plus three items: untaxed foreign income, nontaxable Social Security benefits, and tax-exempt interest. For a freelancer, adjusted gross income starts with Schedule C net profit. Several deductions lower it, and MAGI does not add them back:
- The deductible half of self-employment tax
- The self-employed health insurance deduction
- SEP-IRA, SIMPLE IRA, and Solo 401(k) contributions
- HSA contributions
Why the Line Changes by Year
The 400% line depends on the poverty guidelines in effect when open enrollment begins. So 2026 coverage uses the 2025 guidelines, and 2027 coverage uses the 2026 guidelines.
| Coverage year | Single | Family of four |
|---|---|---|
| 2026 | $62,600 | $128,600 |
| 2027 | $63,840 | $132,000 |
Worked Example
A single freelancer expects $72,000 in net profit for 2027. Self-employment tax comes to $10,173, and half of it, $5,087, is deductible. MAGI lands at $66,913. That is $3,073 over the $63,840 line.
An $8,000 SEP-IRA or Solo 401(k) contribution lowers MAGI to $58,913. That puts the freelancer $4,927 under the line. Try it in the calculator by entering 8000 in the retirement field.
What the Calculator Does Not Do
- It does not calculate the dollar amount of your credit.
- It covers the 48 contiguous states and D.C. Alaska and Hawaii use higher guidelines.
- It does not include state subsidies, which some states offer.
- It uses the 2026 Social Security wage base for both years.
- It ignores the Additional Medicare Tax and any W-2 wages of your own.
Treat the result as a planning estimate. The Marketplace and your tax return are what count.
Frequently Asked Questions
Is the repayment limit still in place? No. Since tax year 2026, there is no cap on repaying excess advance credits, according to the IRS.
Should I include my spouse's income? Yes. Count everyone in your tax household, and enter their income under "Other household income."
Can retirement contributions really lower my ACA income? Yes. SEP-IRA, SIMPLE IRA, and Solo 401(k) contributions reduce adjusted gross income, and MAGI starts there. Only make contributions you would otherwise plan to save.
What if my income changes during the year? Update your Marketplace application promptly. The scenario table shows how a slower or stronger year changes your position.
Learn More
Read our full guide to the self-employed ACA subsidy cliff. Our self-employment tax guide explains the 15.3% calculation, and our Solo 401(k) vs. SEP IRA comparison covers contribution limits.
This calculator is for general educational purposes and is not individualized tax or insurance advice. Last reviewed October 2026. Consult a licensed health insurance agent or Marketplace navigator and a CPA or enrolled agent for your situation.