The Nomad's ACA Subsidy Navigator
An interactive tool for U.S. freelancers and digital nomads to strategically maximize the Premium Tax Credit and avoid common tax traps.
The Core Conflict: FEIE vs. FTC
Your biggest decision is how to handle foreign income. The Foreign Earned Income Exclusion (FEIE) can eliminate your income tax, but it often destroys your eligibility for ACA subsidies. The Foreign Tax Credit (FTC) avoids double taxation while preserving your subsidies. Use this calculator to see the impact.
Your Financial Scenario
Your Estimated Financial Outcome
Key Insight: The MAGI Trap
With the FEIE, your MAGI for PTC purposes is artificially inflated to $65,000, drastically reducing your subsidy. The FTC preserves a lower MAGI, maximizing your credit.
Assess Your Domicile Risk
To get ACA subsidies, you must have a legal U.S. domicile. But your choice of state has huge consequences. Some states have their own income tax and health insurance mandates with penalties. Select your domicile state to see your compliance risks.
Optimize & Comply
Once you have your core strategy, focus on optimization and compliance. For freelancers, the Self-Employed Health Insurance Deduction (SEHID) can be used to lower your income and boost your PTC. For everyone, meticulous documentation is key to surviving an IRS review.
The Freelancer's Edge: SEHID
The Self-Employed Health Insurance Deduction (SEHID) lets you deduct your insurance premiums, which lowers your MAGI. A lower MAGI means a bigger Premium Tax Credit (PTC). It's a "seesaw" - using the deduction strategically maximizes your more valuable credit.
The Goal: Don't just maximize the deduction. Use it as a tool to lower your MAGI into a "sweet spot" that gives you the largest possible PTC.
Your Audit-Proof Checklist
- State Domicile: Keep copies of your lease/deed, driver's license, voter registration, and utility bills for your U.S. address.
- Foreign Travel: Maintain a detailed travel log, keep all boarding passes, and have scans of all passport entry/exit stamps.
- Income & Expenses: Keep all client invoices, 1099s, and bank statements to prove your income and business expenses.
- Insurance & Credits: Save your Form 1095-A from the Marketplace and proof of all premium payments. If claiming the FTC, keep foreign tax returns and receipts.
Official Resources & Next Steps
This tool is for planning purposes. Use these official resources for detailed guidance and always consult a qualified tax professional.
