S-corp, LLC, partnership or 1099 · what changes, across 21 states
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Every owner asks the same two questions: how do I deduct this, and am I anywhere near the subsidy cliff. The first answer depends on how you are taxed. The second depends on where you live, and it varies more than anyone expects — from $3,053 a year in Arkansas down to nothing at all in five states.
| If you are a… | Your income arrives as | And the premium is deducted | Read |
|---|---|---|---|
| Sole proprietor / 1099 | Schedule C net profit | Deduct on Schedule 1, capped at net self-employment income | 1099 contractors |
| Partnership / multi-member LLC | Guaranteed payments on your K-1 | Partnership pays or reimburses; you deduct on Schedule 1 | LLC owners |
| S-corp (or LLC taxed as one) | W-2 salary plus distributions | Premium must appear on the W-2 before you can deduct it | S-corp owners |
| C-corp | Salary; company is a separate taxpayer | Generally a company expense rather than a personal deduction | — |
A single 40-year-old just under $62,600 pays no more than $519.58 a month for the benchmark plan. Just over it, they pay full price. In five states that is the same number, so the cliff costs nothing at that age; in Arkansas it is $3,053 a year.
No. Eligibility is based on household income and household size. The structure changes how the premium is deducted, which changes the income figure the subsidy is measured against.
Partly. These pages are about covering the owner. If you are covering staff as well, the choice is between a small group plan, a QSEHRA and an ICHRA, and it turns on what your employees earn.
Benchmark premiums: the second-lowest-cost Silver plan for a 40-year-old, weighted by county enrollment, from the CMS PY2026 Landscape file, the same figures used across this site. Cliff: 400% of the 2025 HHS poverty guideline (90 FR 5917), $62,600 for a single-adult household. Applicable percentage: 9.96% for 2026 (Rev. Proc. 2025-25). Nothing here is tax advice — the arithmetic is public, the decision is yours and your CPA’s.
Give me a ZIP and your rough income and I will tell you which side of the line you are on, and what it is worth doing about it.