diff --git a/changelog.d/fix-sehi-earned-income-limit.fixed.md b/changelog.d/fix-sehi-earned-income-limit.fixed.md
new file mode 100644
index 00000000000..23e7a80bdb3
--- /dev/null
+++ b/changelog.d/fix-sehi-earned-income-limit.fixed.md
@@ -0,0 +1 @@
+Limit the self-employed health insurance deduction to net profit less the deductible part of self-employment tax and self-employed retirement plan deductions, as 26 U.S.C. 162(l)(2)(A) and Form 7206 require.
diff --git a/changelog.d/sehi-plan-business-base.fixed.md b/changelog.d/sehi-plan-business-base.fixed.md
new file mode 100644
index 00000000000..bc168c32248
--- /dev/null
+++ b/changelog.d/sehi-plan-business-base.fixed.md
@@ -0,0 +1 @@
+Let the self-employed health insurance deduction's earned income limit come from a Schedule F farm, a partnership's K-1 box 14 code A earnings, or a more-than-2% S corporation shareholder's wages when the plan is established under that business (26 U.S.C. 162(l)(2)(A) and (l)(5), Form 7206); the business can be named, and otherwise the person's business with the largest earned income is used.
diff --git a/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_ald.yaml b/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_ald.yaml
new file mode 100644
index 00000000000..e1683e2ce58
--- /dev/null
+++ b/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_ald.yaml
@@ -0,0 +1,154 @@
+# Form 7206 line 14 (the Form 1040 instructions worksheet line 3 before 2023):
+# the smaller of the premiums and the earned income limit. Expected values are
+# hand-computed from the form.
+
+- name: Case 1, premiums above the limit are capped at net profit less half of self-employment tax.
+  period: 2022
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        is_self_employed: true
+        self_employment_income: 2_000
+        health_insurance_premiums: 6_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: TX
+  output:
+    # 2022 Form 1040 instructions worksheet: line 1 is 6,000; line 2 is
+    # 2,000 - 141.2955 (Schedule 1 line 15) = 1,858.7045.
+    self_employed_health_insurance_ald_person: [1_858.7045]
+    self_employed_health_insurance_ald: 1_858.7045
+    # 2,000 - 141.2955 - 1,858.7045.
+    adjusted_gross_income: 0
+
+- name: Case 2, premiums below the limit are deducted in full.
+  period: 2022
+  absolute_error_margin: 0.01
+  input:
+    is_self_employed: true
+    self_employment_income: 50_000
+    health_insurance_premiums: 6_000
+  output:
+    # Line 2: 50,000 - 3,532.3875 = 46,467.6125.
+    self_employed_health_insurance_earned_income_limit: 46_467.6125
+    self_employed_health_insurance_ald_person: 6_000
+
+- name: Case 3, the plan deduction and half of self-employment tax both reduce the cap.
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    is_self_employed: true
+    self_employment_income: 20_000
+    self_employed_pension_contributions_desired: 3_000
+    health_insurance_premiums: 20_000
+  output:
+    # Form 7206: line 3 is 20,000; line 13 is 20,000 - 1,412.955 - 3,000.
+    self_employed_health_insurance_ald_person: 15_587.045
+
+- name: Case 4, a farm business takes its share of the self-employment tax deduction.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    is_self_employed: true
+    self_employment_income: 30_000
+    farm_operations_income: 10_000
+    health_insurance_premiums: 40_000
+  output:
+    # Form 7206 line 13: 30,000 - 0.75 x 2,825.91 = 27,880.5675.
+    self_employed_health_insurance_ald_person: 27_880.5675
+
+- name: Case 5, each spouse's deduction is capped by their own earned income.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        is_self_employed: true
+        self_employment_income: 3_000
+        health_insurance_premiums: 8_000
+      person2:
+        is_self_employed: true
+        self_employment_income: 40_000
+        health_insurance_premiums: 2_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    marital_units:
+      marital_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: TX
+  output:
+    # person1: 3,000 - 3,000 x 0.9235 x 0.153 / 2 = 3,000 - 211.94325.
+    # person2: premiums of 2,000 are under the limit.
+    self_employed_health_insurance_ald_person: [2_788.05675, 2_000]
+    self_employed_health_insurance_ald: 4_788.05675
+
+- name: Case 6, no deduction with a Schedule C loss.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    is_self_employed: true
+    self_employment_income: -5_000
+    health_insurance_premiums: 3_000
+  output:
+    self_employed_health_insurance_ald_person: 0
+
+- name: Case 7, a farmer whose plan is established under the farm deducts up to farm earned income.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    is_self_employed: true
+    farm_operations_income: 20_000
+    health_insurance_premiums: 25_000
+  output:
+    # Form 7206: line 3 is 25,000; line 13 is 20,000 - 1,412.955.
+    self_employed_health_insurance_ald_person: 18_587.045
+    # 20,000 - 1,412.955 - 18,587.045.
+    adjusted_gross_income: 0
+
+- name: Case 8, a partner deducts up to their K-1 box 14 code A earnings less half of self-employment tax.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    is_self_employed: true
+    partnership_income: 30_000
+    partnership_self_employment_net_earnings: 30_000
+    health_insurance_premiums: 40_000
+  output:
+    # Form 7206 line 13: 30,000 - 2,119.4325.
+    self_employed_health_insurance_ald_person: 27_880.5675
+    adjusted_gross_income: 0
+
+- name: Case 9, an S corporation shareholder deducts up to their wages from the corporation.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    is_self_employed: true
+    employment_income: 10_000
+    s_corp_shareholder_medicare_wages: 10_000
+    health_insurance_premiums: 12_000
+  output:
+    # Form 7206: line 3 is 12,000; line 13 is line 11, 10,000.
+    self_employed_health_insurance_ald_person: 10_000
+    adjusted_gross_income: 0
+
+- name: Case 10, a plan named under the smaller farm is limited to the farm's earned income.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    is_self_employed: true
+    self_employment_income: 30_000
+    farm_operations_income: 10_000
+    self_employed_health_insurance_plan_business: SCHEDULE_F
+    health_insurance_premiums: 20_000
+  output:
+    # Form 7206 line 13: 10,000 - 0.25 x 2,825.91.
+    self_employed_health_insurance_ald_person: 9_293.5225
diff --git a/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_earned_income_limit.yaml b/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_earned_income_limit.yaml
new file mode 100644
index 00000000000..1a18a962f0e
--- /dev/null
+++ b/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_earned_income_limit.yaml
@@ -0,0 +1,233 @@
+# Form 7206 lines 4-13 (Pub. 535 Worksheet 6-A before 2023). Expected values
+# are hand-computed from the form: the deductible part of self-employment tax
+# is net profit x 0.9235 x 15.3% / 2 below the Social Security wage base.
+# One Form 7206 per plan: the limit is the earned income of the business under
+# which the plan is established (self_employed_health_insurance_plan_business),
+# or of the person's business with the largest earned income when that input
+# is not supplied.
+
+- name: Case 1, one business, the limit is net profit less half of self-employment tax.
+  period: 2022
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 2_000
+  output:
+    # Line 15: 2,000 x 0.9235 x 0.153 / 2 = 141.2955.
+    self_employment_tax_ald_person: 141.2955
+    # Line 13: 2,000 - 141.2955.
+    self_employed_health_insurance_earned_income_limit: 1_858.7045
+
+- name: Case 2, the SEP, SIMPLE and qualified plan deduction also reduces the limit.
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 20_000
+    self_employed_pension_contributions_desired: 3_000
+  output:
+    # Line 15: 20,000 x 0.9235 x 0.153 / 2 = 1,412.955.
+    self_employment_tax_ald_person: 1_412.955
+    # Line 16 (within the $66,000 annual additions limit).
+    self_employed_pension_contribution_ald_person: 3_000
+    # Lines 8 to 10: 20,000 - 1,412.955 - 3,000.
+    self_employed_health_insurance_earned_income_limit: 15_587.045
+
+- name: Case 3, a farm business takes its share of the self-employment tax deduction.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 30_000
+    farm_operations_income: 10_000
+  output:
+    # Line 15: 40,000 x 0.9235 x 0.153 / 2 = 2,825.91.
+    self_employment_tax_ald_person: 2_825.91
+    # Lines 5 to 8: 30,000 / 40,000 = 0.75; 30,000 - 0.75 x 2,825.91.
+    self_employed_health_insurance_earned_income_limit: 27_880.5675
+
+- name: Case 4, a partnership's self-employment earnings take their share too.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 30_000
+    partnership_self_employment_net_earnings: 30_000
+  output:
+    # Line 15: 60,000 x 0.9235 x 0.153 / 2 = 4,238.865.
+    self_employment_tax_ald_person: 4_238.865
+    # Lines 5 to 8: 30,000 / 60,000 = 0.5; 30,000 - 0.5 x 4,238.865.
+    self_employed_health_insurance_earned_income_limit: 27_880.5675
+
+- name: Case 5, a farm loss is left out of line 5, so the plan business takes the whole deduction.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 30_000
+    farm_operations_income: -10_000
+  output:
+    # Line 15: (30,000 - 10,000) x 0.9235 x 0.153 / 2 = 1,412.955.
+    self_employment_tax_ald_person: 1_412.955
+    # Lines 5 to 8: line 5 is 30,000, so line 6 is 1; 30,000 - 1,412.955.
+    self_employed_health_insurance_earned_income_limit: 28_587.045
+
+- name: Case 6, wages above the Social Security wage base leave only the Medicare part.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    employment_income: 200_000
+    self_employment_income: 10_000
+  output:
+    # Wages exceed the $176,100 wage base, so line 15 is
+    # 10,000 x 0.9235 x 0.029 / 2 = 133.9075.
+    self_employment_tax_ald_person: 133.9075
+    self_employed_health_insurance_earned_income_limit: 9_866.0925
+
+- name: Case 7, net earnings under $400 owe no self-employment tax, so the limit is net profit.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 400
+  output:
+    # 400 x 0.9235 = 369.40, under the $400 threshold of section 1402(b)(2).
+    self_employment_tax_ald_person: 0
+    self_employed_health_insurance_earned_income_limit: 400
+
+- name: Case 8, a plan established under a Schedule C business with a loss has no limit.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: -5_000
+    partnership_self_employment_net_earnings: 20_000
+    self_employed_health_insurance_plan_business: SCHEDULE_C
+  output:
+    self_employed_health_insurance_earned_income_limit: 0
+
+- name: Case 9, a Schedule C loss leaves the partnership as the plan business.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: -5_000
+    partnership_self_employment_net_earnings: 20_000
+  output:
+    # Line 15: (20,000 - 5,000) x 0.9235 x 0.153 / 2 = 1,059.71625.
+    self_employment_tax_ald_person: 1_059.71625
+    # Line 5 leaves out the loss, so line 6 is 1: 20,000 - 1,059.71625.
+    self_employed_health_insurance_earned_income_limit: 18_940.28375
+
+- name: Case 10, a farm is the only business.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    farm_operations_income: 20_000
+  output:
+    # Line 15: 20,000 x 0.9235 x 0.153 / 2 = 1,412.955.
+    self_employment_tax_ald_person: 1_412.955
+    # Lines 4 to 8 for Schedule F: 20,000 - 1,412.955.
+    self_employed_health_insurance_earned_income_limit: 18_587.045
+
+- name: Case 11, a partnership with K-1 box 14 code A earnings is the only business.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    partnership_self_employment_net_earnings: 30_000
+  output:
+    # Line 15: 30,000 x 0.9235 x 0.153 / 2 = 2,119.4325.
+    self_employment_tax_ald_person: 2_119.4325
+    self_employed_health_insurance_earned_income_limit: 27_880.5675
+
+- name: Case 12, without a named business the larger farm is the plan business.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 5_000
+    farm_operations_income: 40_000
+  output:
+    # Line 15: 45,000 x 0.9235 x 0.153 / 2 = 3,179.14875.
+    self_employment_tax_ald_person: 3_179.14875
+    # Farm: 40,000 - 40,000 / 45,000 x 3,179.14875 = 37,174.09.
+    # Schedule C: 5,000 - 5,000 / 45,000 x 3,179.14875 = 4,646.76125.
+    self_employed_health_insurance_earned_income_limit: 37_174.09
+
+- name: Case 13, a named Schedule C business sets the limit even when the farm earns more.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 5_000
+    farm_operations_income: 40_000
+    self_employed_health_insurance_plan_business: SCHEDULE_C
+  output:
+    self_employed_health_insurance_earned_income_limit: 4_646.76125
+
+- name: Case 14, a named farm business takes its own share of the self-employment tax deduction.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 30_000
+    farm_operations_income: 10_000
+    self_employed_health_insurance_plan_business: SCHEDULE_F
+  output:
+    # Line 15: 40,000 x 0.9235 x 0.153 / 2 = 2,825.91.
+    # Lines 5 to 8: 10,000 / 40,000 = 0.25; 10,000 - 0.25 x 2,825.91.
+    self_employed_health_insurance_earned_income_limit: 9_293.5225
+
+- name: Case 15, the plan deduction is attributable to Schedule C, so the partnership earns more.
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: 20_000
+    self_employed_pension_contributions_desired: 15_000
+    partnership_self_employment_net_earnings: 10_000
+  output:
+    # Line 15: 30,000 x 0.9235 x 0.153 / 2 = 2,119.4325.
+    self_employment_tax_ald_person: 2_119.4325
+    self_employed_pension_contribution_ald_person: 15_000
+    # Schedule C: 20,000 - 2 / 3 x 2,119.4325 - 15,000 = 3,587.045.
+    # Partnership (line 9 is 0): 10,000 - 1 / 3 x 2,119.4325 = 9,293.5225.
+    self_employed_health_insurance_earned_income_limit: 9_293.5225
+
+- name: Case 16, an S corporation shareholder's wages are the earned income.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    employment_income: 50_000
+    s_corp_shareholder_medicare_wages: 50_000
+    self_employment_income: 10_000
+  output:
+    # Line 11: 50,000. The Schedule C business would give
+    # 10,000 - 10,000 x 0.9235 x 0.153 / 2 = 9,293.5225.
+    self_employed_health_insurance_earned_income_limit: 50_000
+
+- name: Case 17, a named Schedule C business ignores the S corporation wages.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    employment_income: 50_000
+    s_corp_shareholder_medicare_wages: 50_000
+    self_employment_income: 10_000
+    self_employed_health_insurance_plan_business: SCHEDULE_C
+  output:
+    self_employment_tax_ald_person: 706.4775
+    self_employed_health_insurance_earned_income_limit: 9_293.5225
+
+- name: Case 18, a named partnership sets the limit even when the farm earns more.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    farm_operations_income: 40_000
+    partnership_self_employment_net_earnings: 10_000
+    self_employed_health_insurance_plan_business: PARTNERSHIP
+  output:
+    # Line 15: 50,000 x 0.9235 x 0.153 / 2 = 3,532.3875.
+    self_employment_tax_ald_person: 3_532.3875
+    # Lines 5 to 8: 10,000 / 50,000 = 0.2; 10,000 - 0.2 x 3,532.3875.
+    self_employed_health_insurance_earned_income_limit: 9_293.5225
+
+- name: Case 19, a named S corporation sets the limit even when the Schedule C business earns more.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    employment_income: 10_000
+    s_corp_shareholder_medicare_wages: 10_000
+    self_employment_income: 50_000
+    self_employed_health_insurance_plan_business: S_CORPORATION
+  output:
+    # Line 11: 10,000. The Schedule C business would give
+    # 50,000 - 50,000 x 0.9235 x 0.153 / 2 = 46,467.6125.
+    self_employed_health_insurance_earned_income_limit: 10_000
diff --git a/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employment_income.yaml b/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employment_income.yaml
index 526b7ca01e0..11b233376f0 100644
--- a/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employment_income.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employment_income.yaml
@@ -8,11 +8,13 @@
 
 - name: Self-employed health insurance ALD uses SSTB income
   period: 2024
+  absolute_error_margin: 0.01
   input:
     sstb_self_employment_income: 10_000
     self_employed_health_insurance_premiums: 12_000
   output:
-    self_employed_health_insurance_ald_person: 10_000
+    # Form 7206 line 13: 10,000 - 10,000 x 0.9235 x 0.153 / 2.
+    self_employed_health_insurance_ald_person: 9_293.5225
 
 - name: Self-employed pension ALD uses SSTB income
   period: 2024
diff --git a/policyengine_us/tests/policy/baseline/gov/states/oh/tax/income/deductions/medical_expense/oh_medical_care_insurance_premiums.yaml b/policyengine_us/tests/policy/baseline/gov/states/oh/tax/income/deductions/medical_expense/oh_medical_care_insurance_premiums.yaml
index 36c1c46fd9c..77175d10352 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/oh/tax/income/deductions/medical_expense/oh_medical_care_insurance_premiums.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/oh/tax/income/deductions/medical_expense/oh_medical_care_insurance_premiums.yaml
@@ -33,14 +33,16 @@
 
 - name: Premiums deducted as self-employed health insurance are left out
   period: 2025
+  absolute_error_margin: 0.01
   input:
     state_code: OH
     is_self_employed: true
     self_employment_income: 3_000
     health_insurance_premiums: 5_000
   output:
-    # 5,000 - min(3,000, 5,000).
-    oh_medical_care_insurance_premiums: 2_000
+    # The federal deduction is min(5,000, 3,000 - 3,000 x 0.9235 x 0.153 / 2)
+    # = 2,788.05675 (Form 7206 line 14), so 5,000 - 2,788.05675 remain.
+    oh_medical_care_insurance_premiums: 2_211.94325
 
 - name: The self-employed deduction cannot make premiums negative
   period: 2025
diff --git a/policyengine_us/tests/policy/baseline/gov/states/oh/tax/income/deductions/medical_expense/oh_uninsured_unreimbursed_medical_care_expenses.yaml b/policyengine_us/tests/policy/baseline/gov/states/oh/tax/income/deductions/medical_expense/oh_uninsured_unreimbursed_medical_care_expenses.yaml
index d9eac668dff..b6853f57ac3 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/oh/tax/income/deductions/medical_expense/oh_uninsured_unreimbursed_medical_care_expenses.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/oh/tax/income/deductions/medical_expense/oh_uninsured_unreimbursed_medical_care_expenses.yaml
@@ -179,6 +179,7 @@
   # Worksheet line 1 note: "You must reduce the amount you enter on this line
   # by your federal self-employed health insurance deduction".
   period: 2025
+  absolute_error_margin: 0.01
   input:
     people:
       person1:
@@ -194,7 +195,8 @@
         members: [person1]
         state_code: OH
   output:
-    # min(3,000 of earnings, 5,000 of premiums).
-    self_employed_health_insurance_ald: 3_000
-    # 5,000 - 3,000.
-    oh_uninsured_unreimbursed_medical_care_expenses: 2_000
+    # Form 7206 line 14: min(5,000 of premiums, 3,000 of earnings less the
+    # 211.94325 deductible part of self-employment tax).
+    self_employed_health_insurance_ald: 2_788.05675
+    # 5,000 - 2,788.05675.
+    oh_uninsured_unreimbursed_medical_care_expenses: 2_211.94325
diff --git a/policyengine_us/tests/unit/test_self_employed_health_insurance_properties.py b/policyengine_us/tests/unit/test_self_employed_health_insurance_properties.py
new file mode 100644
index 00000000000..1349c09c55e
--- /dev/null
+++ b/policyengine_us/tests/unit/test_self_employed_health_insurance_properties.py
@@ -0,0 +1,274 @@
+"""Properties of the self-employed health insurance deduction.
+
+26 U.S.C. 162(l)(2)(A) limits the deduction to the taxpayer's earned income,
+within the meaning of section 401(c), from the business under which the plan
+is established. Section 401(c)(2)(A)(v) and (vi) determine that earned income
+with regard to the section 404 plan deduction and the section 164(f) deduction
+for half of self-employment tax, and section 162(l)(5) makes an S corporation
+shareholder's wages from the corporation their earned income. Form 7206 (Pub.
+535 Worksheet 6-A before 2023), one form per plan, computes it as the plan
+business's net profit (line 4), less the part of Schedule 1 line 15
+attributable to that business by its share of all net profits subject to
+self-employment tax (lines 5 to 8), less the Schedule 1 line 16 plan deduction
+attributable to it (lines 9 and 10), or as the S corporation wages (line 11);
+the deduction is the smaller of the premiums and that amount (line 14). The
+plan business may be a Schedule C business, a Schedule F farm, a partnership
+(K-1 box 14 code A) or an S corporation. When
+self_employed_health_insurance_plan_business is not supplied, the model uses
+the business with the largest earned income. The model bases the line 16 plan
+deduction on Schedule C income, so only the Schedule C business subtracts it.
+
+Hypothesis draws batches of self-employed single filers and runs each batch as
+one vectorized baseline simulation. Each drawn filer appears six times: with
+no named plan business, again with higher premiums, and once naming each of
+the four businesses. For every filer and year:
+
+1. Reference: each limit equals a closed-form Form 7206 computation for its
+   plan business that takes lines 15 and 16 from the model, and line 15
+   equals half of the self-employment tax. Without a named business, the
+   limit is the largest of the four.
+2. Differential: the limit without a named business equals the largest of the
+   limits the model computes when each business is named, so one plan never
+   pools the earned income of two businesses.
+3. Bounds: 0 <= deduction <= premiums, and the limit is at least the Schedule
+   C limit (widening the base never lowers the deduction).
+4. Monotone in premiums: raising premiums by d raises the deduction by at
+   least 0 and at most d, and leaves the limit unchanged.
+5. For a filer with no business losses whose income is wages and
+   self-employment income, the deduction never takes adjusted gross income
+   below the Schedule C line 10 amount before its floor at zero. That amount
+   is negative only when the Schedule 1 line 16 plan deduction exceeds the
+   Schedule C business's net profit less its share of line 15; otherwise
+   adjusted gross income stays at or above zero. Intended: a plan under the
+   farm or partnership does not subtract the Schedule C plan deduction.
+"""
+
+import numpy as np
+from hypothesis import HealthCheck, given, settings
+from hypothesis import strategies as st
+
+from policyengine_us import Simulation
+
+TOLERANCE = 0.01
+# Model outputs are float32, whose spacing exceeds a cent above $131,072.
+RTOL = 1e-6
+YEARS = [2022, 2024, 2026]
+PREMIUM_RAISE = 2_500
+BUSINESSES = ["SCHEDULE_C", "SCHEDULE_F", "PARTNERSHIP", "S_CORPORATION"]
+# (name prefix, named plan business, premium raise) for each copy of a filer.
+COPIES = [("u", "UNSPECIFIED", 0), ("r", "UNSPECIFIED", PREMIUM_RAISE)] + [
+    (business.lower(), business, 0) for business in BUSINESSES
+]
+
+
+def every_year(value):
+    return {year: value for year in YEARS}
+
+
+def build_situation(filers):
+    """One single-filer household for each copy of each drawn filer."""
+    people, tax_units, households = {}, {}, {}
+    for prefix, plan_business, raise_ in COPIES:
+        for i, filer in enumerate(filers):
+            name = f"{prefix}{i}"
+            people[name] = {
+                "age": every_year(45),
+                "is_self_employed": every_year(True),
+                "self_employment_income": every_year(filer["schedule_c"]),
+                "farm_operations_income": every_year(filer["farm"]),
+                "partnership_self_employment_net_earnings": every_year(
+                    filer["partnership"]
+                ),
+                # The partnership's earnings also enter gross income.
+                "partnership_income": every_year(filer["partnership"]),
+                # S corporation wages are part of employment income.
+                "employment_income": every_year(filer["wages"] + filer["s_corp"]),
+                "s_corp_shareholder_medicare_wages": every_year(filer["s_corp"]),
+                "self_employed_pension_contributions_desired": every_year(
+                    filer["plan"]
+                ),
+                "health_insurance_premiums": every_year(filer["premiums"] + raise_),
+                "self_employed_health_insurance_plan_business": every_year(
+                    plan_business
+                ),
+            }
+            tax_units[name] = {"members": [name]}
+            households[name] = {"members": [name], "state_code": every_year("TX")}
+    situation = {"people": people, "tax_units": tax_units, "households": households}
+    return situation, len(filers)
+
+
+def form_7206_limits(schedule_c, farm, partnership, s_corp, line_15, line_16):
+    """Form 7206 line 13 for each plan business, with lines 15 and 16 given.
+
+    Also returns the Schedule C line 10 amount before its floor at zero.
+    """
+    line_4 = {
+        "SCHEDULE_C": np.maximum(schedule_c, 0),
+        "SCHEDULE_F": np.maximum(farm, 0),
+        "PARTNERSHIP": np.maximum(partnership, 0),
+    }
+    line_5 = sum(line_4.values())
+    safe_line_5 = np.where(line_5 > 0, line_5, 1)
+    line_10 = {}
+    for business, profit in line_4.items():
+        line_6 = np.where(line_5 > 0, profit / safe_line_5, 0)
+        line_8 = profit - line_15 * line_6
+        line_9 = line_16 if business == "SCHEDULE_C" else 0
+        line_10[business] = line_8 - line_9
+    line_13 = {business: np.maximum(amount, 0) for business, amount in line_10.items()}
+    line_13["S_CORPORATION"] = np.maximum(s_corp, 0)
+    return line_13, line_10["SCHEDULE_C"]
+
+
+def close(actual, expected):
+    np.testing.assert_allclose(actual, expected, rtol=RTOL, atol=TOLERANCE)
+
+
+def at_least(actual, bound):
+    return np.all(actual >= bound - TOLERANCE - RTOL * np.abs(bound))
+
+
+def column(filers, key):
+    return np.array([float(f[key]) for f in filers])
+
+
+def check_properties(sim, filers, n):
+    def copy(array, prefix):
+        index = [p for p, _, _ in COPIES].index(prefix)
+        return array[index * n : (index + 1) * n]
+
+    schedule_c = column(filers, "schedule_c")
+    farm = column(filers, "farm")
+    partnership = column(filers, "partnership")
+    s_corp = column(filers, "s_corp")
+    for year in YEARS:
+        premiums = sim.calculate("self_employed_health_insurance_premiums", year)
+        limit = sim.calculate(
+            "self_employed_health_insurance_earned_income_limit", year
+        )
+        deduction = sim.calculate("self_employed_health_insurance_ald_person", year)
+        line_15 = sim.calculate("self_employment_tax_ald_person", year)
+        line_16 = sim.calculate("self_employed_pension_contribution_ald_person", year)
+        se_tax = sim.calculate("self_employment_tax", year)
+        agi = sim.calculate("adjusted_gross_income", year)
+
+        # Lines 15 and 16 and the deduction for every copy.
+        close(line_15, se_tax / 2)
+        close(deduction, np.minimum(premiums, limit))
+        # Lines 15 and 16 do not depend on premiums or the named business.
+        for prefix, _, _ in COPIES[1:]:
+            close(copy(line_15, prefix), copy(line_15, "u"))
+            close(copy(line_16, prefix), copy(line_16, "u"))
+        line_13, schedule_c_line_10 = form_7206_limits(
+            schedule_c,
+            farm,
+            partnership,
+            s_corp,
+            copy(line_15, "u"),
+            copy(line_16, "u"),
+        )
+        largest = np.max(np.stack(list(line_13.values())), axis=0)
+
+        # 1. Reference.
+        close(copy(limit, "u"), largest)
+        for business in BUSINESSES:
+            close(copy(limit, business.lower()), line_13[business])
+
+        # 2. Differential: the default equals the best named business.
+        named = np.stack([copy(limit, b.lower()) for b in BUSINESSES])
+        close(copy(limit, "u"), named.max(axis=0))
+
+        # 3. Bounds.
+        assert np.all(deduction >= 0)
+        assert at_least(premiums, deduction)
+        assert at_least(copy(limit, "u"), line_13["SCHEDULE_C"])
+
+        # 4. Monotone and 1-Lipschitz in premiums; the limit ignores premiums.
+        base, raised = copy(deduction, "u"), copy(deduction, "r")
+        assert at_least(raised, base)
+        assert at_least(base + PREMIUM_RAISE, raised)
+        close(copy(limit, "u"), copy(limit, "r"))
+
+        # 5. Adjusted gross income floor for filers with no business losses.
+        no_losses = (schedule_c >= 0) & (farm >= 0) & (partnership >= 0)
+        floor = np.minimum(0, schedule_c_line_10)
+        for prefix, _, _ in COPIES:
+            assert at_least(copy(agi, prefix)[no_losses], floor[no_losses])
+
+
+money = st.integers(0, 120_000)
+filer_strategy = st.fixed_dictionaries(
+    {
+        "schedule_c": st.one_of(
+            st.sampled_from([-5_000, 0, 400, 434, 2_000, 160_000, 250_000]),
+            st.integers(-20_000, 300_000),
+        ),
+        "farm": st.one_of(st.just(0), st.integers(-30_000, 100_000)),
+        "partnership": st.one_of(st.just(0), st.integers(-30_000, 100_000)),
+        "s_corp": st.one_of(st.just(0), st.integers(0, 150_000)),
+        "wages": st.one_of(st.just(0), st.integers(0, 250_000)),
+        "plan": st.one_of(st.just(0), money),
+        "premiums": st.one_of(st.sampled_from([0, 1_000, 6_000]), money),
+    }
+)
+SETTINGS = dict(
+    max_examples=12,
+    deadline=None,
+    derandomize=True,
+    suppress_health_check=[HealthCheck.too_slow, HealthCheck.data_too_large],
+)
+
+
+@settings(**SETTINGS)
+@given(st.lists(filer_strategy, min_size=4, max_size=20))
+def test_deduction_follows_form_7206(filers):
+    situation, n = build_situation(filers)
+    check_properties(Simulation(situation=situation), filers, n)
+
+
+def filer(schedule_c=0, farm=0, partnership=0, s_corp=0, wages=0, plan=0, premiums=0):
+    return dict(
+        schedule_c=schedule_c,
+        farm=farm,
+        partnership=partnership,
+        s_corp=s_corp,
+        wages=wages,
+        plan=plan,
+        premiums=premiums,
+    )
+
+
+def test_reviewer_example_and_boundaries():
+    """Fixed filers: the $2,000 example, the $400 threshold, and the new bases."""
+    filers = [
+        filer(schedule_c=2_000, premiums=6_000),
+        filer(schedule_c=434, premiums=6_000),
+        filer(schedule_c=433, premiums=6_000),
+        filer(schedule_c=10_000, wages=250_000, premiums=20_000),
+        filer(schedule_c=30_000, farm=10_000, premiums=40_000),
+        filer(schedule_c=20_000, plan=20_000, premiums=5_000),
+        # A farm or a partnership as the only business.
+        filer(farm=2_000, premiums=6_000),
+        filer(partnership=2_000, premiums=6_000),
+        # S corporation wages.
+        filer(s_corp=5_000, premiums=6_000),
+        # A plan deduction as large as the Schedule C profit, with the farm as
+        # the plan business (property 5).
+        filer(schedule_c=20_000, plan=20_000, farm=50_000, premiums=100_000),
+    ]
+    situation, n = build_situation(filers)
+    sim = Simulation(situation=situation)
+    check_properties(sim, filers, n)
+    deduction = sim.calculate("self_employed_health_insurance_ald_person", 2022)[:n]
+    # 2,000 - 2,000 x 0.9235 x 0.153 / 2, for a Schedule C business, a farm and
+    # a partnership alike.
+    for i in (0, 6, 7):
+        assert abs(deduction[i] - 1_858.7045) < TOLERANCE
+    # 434 x 0.9235 = 400.80 owes self-employment tax; 433 x 0.9235 = 399.88 does not.
+    assert deduction[1] < 434 - TOLERANCE
+    assert abs(deduction[2] - 433) < TOLERANCE
+    # Line 11: the S corporation wages, with no self-employment tax.
+    assert abs(deduction[8] - 5_000) < TOLERANCE
+    # Farm line 13: 50,000 - 50,000 / 70,000 x (70,000 x 0.9235 x 0.153 / 2).
+    assert abs(deduction[9] - (50_000 - 50_000 * 0.9235 * 0.153 / 2)) < TOLERANCE
diff --git a/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_ald_person.py b/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_ald_person.py
index 8ecda97461a..939b3ba1e96 100644
--- a/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_ald_person.py
+++ b/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_ald_person.py
@@ -6,11 +6,23 @@ class self_employed_health_insurance_ald_person(Variable):
     entity = Person
     label = "Self-employed health insurance ALD for each person"
     unit = USD
-    documentation = "Personal above-the-line deduction for self-employed health insurance contributions."
+    documentation = (
+        "Personal above-the-line deduction for self-employed health insurance "
+        "premiums: the smaller of the premiums and the earned income from the "
+        "business under which the plan is established (Form 7206 line 14). "
+        "The premiums exclude qualified long-term care insurance (line 2), "
+        "which the model does not include in self-employed premiums."
+    )
     definition_period = YEAR
-    reference = "https://www.law.cornell.edu/uscode/text/26/162#l"
+    reference = (
+        "https://www.law.cornell.edu/uscode/text/26/162#l",
+        "https://www.irs.gov/pub/irs-prior/f7206--2023.pdf#page=1",
+        "https://www.irs.gov/pub/irs-prior/i1040gi--2022.pdf#page=89",
+    )
 
     def formula(person, period, parameters):
-        earnings = max_(0, person("total_self_employment_income", period))
         premiums = person("self_employed_health_insurance_premiums", period)
-        return min_(earnings, premiums)
+        earned_income_limit = person(
+            "self_employed_health_insurance_earned_income_limit", period
+        )
+        return min_(premiums, earned_income_limit)
diff --git a/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_earned_income_limit.py b/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_earned_income_limit.py
new file mode 100644
index 00000000000..8dd5db0052e
--- /dev/null
+++ b/policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/above_the_line_deductions/self_employed_health_insurance_earned_income_limit.py
@@ -0,0 +1,95 @@
+from policyengine_us.model_api import *
+
+
+class self_employed_health_insurance_earned_income_limit(Variable):
+    value_type = float
+    entity = Person
+    label = "Self-employed health insurance deduction earned income limit"
+    unit = USD
+    documentation = (
+        "Earned income, within the meaning of 26 U.S.C. 401(c), from the "
+        "business under which the health plan is established; the "
+        "self-employed health insurance deduction cannot exceed it (Form "
+        "7206 line 13). The plan may be established under a Schedule C "
+        "business, a Schedule F farm, a partnership that reports net earnings "
+        "on Schedule K-1 box 14 code A, or an S corporation in which the "
+        "person is a more-than-2% shareholder, and earned income from other "
+        "businesses does not count. For each of the first three, earned income "
+        "is net profit less the part of the deductible part of "
+        "self-employment tax attributable to that business (lines 4 to 8) and "
+        "less the self-employed SEP, SIMPLE and qualified plan deduction "
+        "attributable to it (lines 9 and 10); the model bases that plan "
+        "deduction on Schedule C income, so only the Schedule C business "
+        "subtracts it. For an S corporation it is the shareholder's wages "
+        "from the corporation (line 11). self_employed_health_insurance_plan_"
+        "business names the business; when it is not supplied, the limit uses "
+        "the business with the largest earned income, the most that one plan "
+        "can deduct. Self-employment income inputs are already net of any "
+        "section 911 exclusion (line 12)."
+    )
+    definition_period = YEAR
+    reference = (
+        "https://www.law.cornell.edu/uscode/text/26/162#l_2_A",
+        "https://www.law.cornell.edu/uscode/text/26/162#l_5",
+        "https://www.law.cornell.edu/uscode/text/26/401#c_2_A",
+        "https://www.irs.gov/pub/irs-prior/f7206--2023.pdf#page=1",
+        # Where a plan may be established, and one Form 7206 per plan.
+        # PDF pages 1-2
+        "https://www.irs.gov/pub/irs-prior/i7206--2023.pdf#page=1",
+        # The worksheet Form 7206 replaced, used before 2023.
+        "https://www.irs.gov/pub/irs-prior/p535--2022.pdf#page=23",
+        # The single-business worksheet in the Form 1040 instructions.
+        "https://www.irs.gov/pub/irs-prior/i1040gi--2022.pdf#page=89",
+    )
+
+    def formula(person, period, parameters):
+        # Line 4 for each business that can establish a plan: its net profit,
+        # or a partner's net earnings from self-employment.
+        schedule_c_profit = max_(0, person("total_self_employment_income", period))
+        farm_profit = max_(0, person("farm_operations_income", period))
+        partnership_profit = max_(
+            0, person("partnership_self_employment_net_earnings", period)
+        )
+        # Line 5: net profits of every business whose earnings are subject to
+        # self-employment tax, leaving out net losses.
+        all_business_profits = schedule_c_profit + farm_profit + partnership_profit
+        # Lines 6 and 7: each business takes the deductible part of
+        # self-employment tax (Schedule 1 line 15) in proportion to its share
+        # of line 5.
+        self_employment_tax_deduction = person("self_employment_tax_ald_person", period)
+        self_employment_tax_deduction_rate = np.divide(
+            self_employment_tax_deduction,
+            all_business_profits,
+            out=np.zeros_like(all_business_profits),
+            where=all_business_profits > 0,
+        )
+        # Lines 9 and 10: the SEP, SIMPLE and qualified plan deduction
+        # (Schedule 1 line 16) is attributable to the Schedule C business.
+        retirement_plan_deduction = person(
+            "self_employed_pension_contribution_ald_person", period
+        )
+        # Line 10 for each self-employment business.
+        schedule_c = max_(
+            0,
+            schedule_c_profit * (1 - self_employment_tax_deduction_rate)
+            - retirement_plan_deduction,
+        )
+        farm = max_(0, farm_profit * (1 - self_employment_tax_deduction_rate))
+        partnership = max_(
+            0, partnership_profit * (1 - self_employment_tax_deduction_rate)
+        )
+        # Line 11: an S corporation shareholder's wages from the corporation.
+        s_corporation = max_(0, person("s_corp_shareholder_medicare_wages", period))
+        plan_business = person("self_employed_health_insurance_plan_business", period)
+        businesses = plan_business.possible_values
+        return select(
+            [
+                plan_business == businesses.SCHEDULE_C,
+                plan_business == businesses.SCHEDULE_F,
+                plan_business == businesses.PARTNERSHIP,
+                plan_business == businesses.S_CORPORATION,
+            ],
+            [schedule_c, farm, partnership, s_corporation],
+            # UNSPECIFIED: the business with the largest earned income.
+            default=max_(max_(schedule_c, farm), max_(partnership, s_corporation)),
+        )
diff --git a/policyengine_us/variables/household/expense/health/self_employed_health_insurance_plan_business.py b/policyengine_us/variables/household/expense/health/self_employed_health_insurance_plan_business.py
new file mode 100644
index 00000000000..10dd54031ef
--- /dev/null
+++ b/policyengine_us/variables/household/expense/health/self_employed_health_insurance_plan_business.py
@@ -0,0 +1,44 @@
+from policyengine_us.model_api import *
+
+
+class SelfEmployedHealthInsurancePlanBusiness(Enum):
+    SCHEDULE_C = "Schedule C business"
+    SCHEDULE_F = "Schedule F farm"
+    PARTNERSHIP = "Partnership"
+    S_CORPORATION = "S corporation"
+    UNSPECIFIED = "Unspecified"
+
+
+class self_employed_health_insurance_plan_business(Variable):
+    value_type = Enum
+    entity = Person
+    possible_values = SelfEmployedHealthInsurancePlanBusiness
+    default_value = SelfEmployedHealthInsurancePlanBusiness.UNSPECIFIED
+    definition_period = YEAR
+    label = (
+        "Business under which the self-employed health insurance plan is established"
+    )
+    documentation = (
+        "The trade or business under which the person's health insurance plan "
+        "is established, or considered to be established: the Schedule C "
+        "business, the Schedule F farm, a partnership in which the person has "
+        "Schedule K-1 box 14 code A net earnings, or an S corporation in which "
+        "the person is a more-than-2% shareholder. The self-employed health "
+        "insurance deduction is limited to the earned income from that "
+        "business alone (one Form 7206 per plan). The Schedule C business is "
+        "all of the person's Schedule C income, SSTB and non-SSTB together, "
+        "because the inputs do not separate one Schedule C business from "
+        "another. A partner's or shareholder's own policy counts as "
+        "established under the partnership or S corporation only when that "
+        "business pays or reimburses the premiums and reports them as "
+        "guaranteed payments or wages. UNSPECIFIED (the default) means the "
+        "business was not supplied, and the limit uses the person's business "
+        "with the largest earned income; name the business when a partnership "
+        "or S corporation with the largest earned income does not pay or "
+        "reimburse the premiums."
+    )
+    reference = (
+        "https://www.law.cornell.edu/uscode/text/26/162#l_2_A",
+        # PDF pages 1-2
+        "https://www.irs.gov/pub/irs-prior/i7206--2023.pdf#page=1",
+    )
diff --git a/policyengine_us/variables/household/income/person/self_employment/s_corp_shareholder_medicare_wages.py b/policyengine_us/variables/household/income/person/self_employment/s_corp_shareholder_medicare_wages.py
new file mode 100644
index 00000000000..c9958cc6877
--- /dev/null
+++ b/policyengine_us/variables/household/income/person/self_employment/s_corp_shareholder_medicare_wages.py
@@ -0,0 +1,26 @@
+from policyengine_us.model_api import *
+
+
+class s_corp_shareholder_medicare_wages(Variable):
+    value_type = float
+    entity = Person
+    label = "S corporation shareholder Medicare wages"
+    unit = USD
+    documentation = (
+        "Medicare wages (Form W-2 box 5) from an S corporation in which the "
+        "person is a more-than-2% shareholder (section 1372(b)). Section "
+        "162(l)(5) treats these wages as the shareholder's earned income for "
+        "the self-employed health insurance deduction (Form 7206 line 11). "
+        "Like the other income inputs, enter the amount left after any "
+        "section 911 foreign earned income exclusion attributable to these "
+        "wages (line 12). They are part of employment_income, not in addition "
+        "to it. As for other self-employed people, the deduction counts "
+        "health_insurance_premiums only when is_self_employed is true."
+    )
+    definition_period = YEAR
+    reference = (
+        "https://www.law.cornell.edu/uscode/text/26/162#l_5",
+        "https://www.law.cornell.edu/uscode/text/26/1372",
+        "https://www.irs.gov/pub/irs-prior/f7206--2023.pdf#page=1",
+    )
+    uprating = "calibration.gov.irs.soi.employment_income"