I tend to agree that you simply reduce your premium (if you are reporting the premium as a business expense on schedule C). For example, if your 2024 premium was $1000 and you received a $100 rebate that was paid in 2024 (even for a prior year), you would report the net premium for 2024 of $900.
If you do report the full premium deduction of $1000 and misc business income of $100 (or $242 in your case), and that causes an oversized adjustment, that is because the premium tax credit was not well designed and there is no gradual phase out when your income gets close to the threshold. Instead, you would need to look for some extra business expenses to lower your income...make sure you didn't forget everything and make sure to take every expense possible. But reporting the net premium rather than income may have a less drastic effect.
