I had assumed, apparently too optimistically, that the major tax prep software programs would be able to easily handle the problem of reconciling the self-employed health insurance deduction (line 29 on form 1040) with the premium tax credit calculation (form 8962). After all, as complex as the IRS instructions may be, the actual calculation is simple math. IRS regulations have now given clear guidance, with two methods for calculation, and this should be a fairly easy task to integrate into the program software.
Unfortunately, this does not appear to be the case. I personally use H&R Block tax prep software and buy the “Premium” version which is advertised as best for self-employed. But when I experimented with the program, I found it didn’t seem to be making any reconciliation at all. Instead, the program was erroneously calculating the tax credit based on the MAGI with whatever value had been previously entered as the total self-employment premium, without making any adjustments as required by IRS.