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/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..2937a6441e7
--- /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 +1,102 @@
+# 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
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..4c9af5e3662
--- /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 +1,95 @@
+# 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.
+
+- 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 Schedule C loss leaves no limit.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    self_employment_income: -5_000
+    partnership_self_employment_net_earnings: 20_000
+  output:
+    self_employed_health_insurance_earned_income_limit: 0
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..9d6cf8ffe5a
--- /dev/null
+++ b/policyengine_us/tests/unit/test_self_employed_health_insurance_properties.py
@@ -0,0 +1,199 @@
+"""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. Form 7206 (Pub. 535 Worksheet 6-A before
+2023) 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 (lines 9 and 10); the deduction is the smaller of the
+premiums and that amount (line 14). The model treats a person's Schedule C
+income as the plan business.
+
+Hypothesis draws batches of self-employed single filers and runs each batch as
+one vectorized baseline simulation. Each drawn filer appears twice, the second
+time with higher premiums. For every filer and year:
+
+1. Reference: the limit equals a closed-form Form 7206 computation that takes
+   lines 15 and 16 from the model, and line 15 equals half of the
+   self-employment tax.
+2. Bounds: 0 <= deduction <= premiums, and deduction <= Schedule C profit less
+   the attributable part of line 15 (earned income after the self-employment
+   tax deduction), which never exceeds Schedule C profit.
+3. Monotone in premiums: raising premiums by d raises the deduction by at
+   least 0 and at most d, and leaves the limit unchanged.
+4. The deduction never makes adjusted gross income negative for a filer whose
+   only income is Schedule C profit: such a filer with negative AGI (from the
+   plan deduction) has no health insurance 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
+YEARS = [2022, 2024, 2026]
+PREMIUM_RAISE = 2_500
+
+
+def every_year(value):
+    return {year: value for year in YEARS}
+
+
+def build_situation(filers):
+    """One single-filer household per drawn filer, then again with higher premiums."""
+    people, tax_units, households = {}, {}, {}
+    for raised in (False, True):
+        for i, filer in enumerate(filers):
+            name = f"{'r' if raised else 'b'}{i}"
+            premiums = filer["premiums"] + (PREMIUM_RAISE if raised else 0)
+            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"]
+                ),
+                "employment_income": every_year(filer["wages"]),
+                "self_employed_pension_contributions_desired": every_year(
+                    filer["plan"]
+                ),
+                "health_insurance_premiums": every_year(premiums),
+            }
+            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_limit(schedule_c, farm, partnership, line_15, line_16):
+    """Form 7206 lines 4 to 10 and 13, with lines 15 and 16 as given amounts."""
+    line_4 = np.maximum(schedule_c, 0)
+    line_5 = line_4 + np.maximum(farm, 0) + np.maximum(partnership, 0)
+    line_6 = np.where(line_5 > 0, line_4 / np.where(line_5 > 0, line_5, 1), 0)
+    line_8 = line_4 - line_15 * line_6
+    return np.maximum(line_8 - line_16, 0), line_8
+
+
+def column(filers, key, n_copies=2):
+    return np.tile(np.array([float(f[key]) for f in filers]), n_copies)
+
+
+def check_properties(sim, filers, n):
+    schedule_c = column(filers, "schedule_c")
+    farm = column(filers, "farm")
+    partnership = column(filers, "partnership")
+    wages = column(filers, "wages")
+    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)
+
+        # 1. Reference.
+        np.testing.assert_allclose(line_15, se_tax / 2, atol=TOLERANCE)
+        expected_limit, after_se_tax = form_7206_limit(
+            schedule_c, farm, partnership, line_15, line_16
+        )
+        np.testing.assert_allclose(limit, expected_limit, atol=TOLERANCE)
+        np.testing.assert_allclose(
+            deduction, np.minimum(premiums, expected_limit), atol=TOLERANCE
+        )
+
+        # 2. Bounds.
+        assert np.all(deduction >= 0)
+        assert np.all(deduction <= premiums + TOLERANCE)
+        assert np.all(deduction <= np.maximum(after_se_tax, 0) + TOLERANCE)
+        assert np.all(after_se_tax <= np.maximum(schedule_c, 0) + TOLERANCE)
+
+        # 3. Monotone and 1-Lipschitz in premiums; the limit ignores premiums.
+        base, raised = deduction[:n], deduction[n:]
+        assert np.all(raised >= base - TOLERANCE)
+        assert np.all(raised <= base + PREMIUM_RAISE + TOLERANCE)
+        np.testing.assert_allclose(limit[:n], limit[n:], atol=TOLERANCE)
+
+        # 4. The deduction never takes Schedule C-only AGI below zero.
+        schedule_c_only = (farm == 0) & (partnership == 0) & (wages == 0)
+        agi = sim.calculate("adjusted_gross_income", year)
+        negative_agi = schedule_c_only & (agi < -TOLERANCE)
+        assert np.all(deduction[negative_agi] <= TOLERANCE)
+
+
+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)),
+        "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 test_reviewer_example_and_boundaries():
+    """Fixed filers: the $2,000 example, the $400 threshold, and a wage-base case."""
+    filers = [
+        dict(schedule_c=2_000, farm=0, partnership=0, wages=0, plan=0, premiums=6_000),
+        dict(schedule_c=434, farm=0, partnership=0, wages=0, plan=0, premiums=6_000),
+        dict(schedule_c=433, farm=0, partnership=0, wages=0, plan=0, premiums=6_000),
+        dict(
+            schedule_c=10_000,
+            farm=0,
+            partnership=0,
+            wages=250_000,
+            plan=0,
+            premiums=20_000,
+        ),
+        dict(
+            schedule_c=30_000,
+            farm=10_000,
+            partnership=0,
+            wages=0,
+            plan=0,
+            premiums=40_000,
+        ),
+        dict(
+            schedule_c=20_000,
+            farm=0,
+            partnership=0,
+            wages=0,
+            plan=20_000,
+            premiums=5_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)
+    # 2,000 - 2,000 x 0.9235 x 0.153 / 2.
+    assert abs(deduction[0] - 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
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..91cb5423d44
--- /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 +1,64 @@
+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 model treats the person's Schedule C business as "
+        "that business. Its net profit is reduced by the part of the "
+        "deductible part of self-employment tax attributable to it (lines 5 "
+        "to 7) and by the self-employed SEP, SIMPLE and qualified plan "
+        "deduction (line 9), which the model also bases on Schedule C income. "
+        "S corporation wages (line 11) are not modeled, and 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/26/401#c_2_A",
+        "https://www.irs.gov/pub/irs-prior/f7206--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: net profit from the business under which the plan is
+        # established.
+        plan_business_profit = max_(0, person("total_self_employment_income", period))
+        # Line 5: net profits of every business whose earnings are subject to
+        # self-employment tax, leaving out net losses.
+        other_business_profits = max_(
+            0, person("farm_operations_income", period)
+        ) + max_(0, person("partnership_self_employment_net_earnings", period))
+        all_business_profits = plan_business_profit + other_business_profits
+        # Line 6: the plan business's share of those profits.
+        plan_business_share = np.divide(
+            plan_business_profit,
+            all_business_profits,
+            out=np.zeros_like(all_business_profits),
+            where=all_business_profits > 0,
+        )
+        # Lines 7 and 8: the deductible part of self-employment tax
+        # (Schedule 1 line 15) attributable to the plan business.
+        self_employment_tax_deduction = (
+            person("self_employment_tax_ald_person", period) * plan_business_share
+        )
+        # Lines 9 and 10: the SEP, SIMPLE and qualified plan deduction
+        # (Schedule 1 line 16) for the plan business.
+        retirement_plan_deduction = person(
+            "self_employed_pension_contribution_ald_person", period
+        )
+        return max_(
+            0,
+            plan_business_profit
+            - self_employment_tax_deduction
+            - retirement_plan_deduction,
+        )