How Much is the Obama Care (Affordable Care Act or ACA) Tax Penalty?

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How Much Is the Obamacare Tax Penalty?

Under the Affordable Care Act, most Americans are required to have health insurance. When you file your taxes in April, you'll have to report whether or not you enrolled by the deadline. (For 2014, you must have had coverage beginning no later than May 1, 2014.) If you didn't get covered, and you don't qualify for an exemption, you'll have to pay a penalty -- often called a "fee" by the federal government.

How the Obamacare Tax Penalty Works

For 2014, if you don't have health insurance and you don't qualify for an exemption, you'll have to pay a penalty of $95 per adult plus $47.50 per child (up to a maximum of $285 for a family) or 1% of your household income, whichever is greater. The flat dollar amount is reduced by 50% for dependents under the age of 18.

The fee increases each year until you get coverage. For 2015, penalty is $325 per adult plus $162.50 per child (with a family maximum of $975) or 2% of annual family income. And in 2016, the fee will be $695 per adult plus $347.50 per child (with a maximum of $2,085) or 2.5% of family income.

For purposes of determining the penalty, "income" is defined as what your household earns in excess of the income-tax filing threshold. (For 2014, the threshold is $10,150 for an individual and $20,300 for married couples filing jointly.) For instance, if you are a single woman who earns $45,000 in 2014, the penalty will be based on $34,850 of your income. One percent of $35,000 is $348.50. Because that amount is greater than $95, your penalty will be $348.50.

If you have insurance for part of the year, your penalty will be reduced proportionately. And the penalty can never exceed the national average premium for a bronze policy purchased through the exchange. (A congressional research report estimated that to be about $4,500 for an individual or $12,000 for a family of four, but this figure may vary considerably.)

Keep in mind that paying the fee doesn’t get you any kind of health coverage. You will have to pay the entire cost of your medical care on top of any fees that you owe.

The following video explains the basics of the Obamacare tax penalty.

 

Obamacare Tax Penalty for 2014

The following table estimates the Obamacare tax penalty for a single taxpayer who is uninsured for the entire year in 2014. As discussed above, "income" is the amount earned in excess of $10,150, the income tax filing threshold for an individual in 2014. 

Annual Income Over $10, 150  1% of income  2014 Obamacare Tax  Per Month
 $0   N/A   $0  $0
 $5,000  $50  $95.00  $7.92
 $10,000  $100  $100.00  $8.33
 $15,000  $150  $150.00  $12.50
 $20,000  $200  $200.00  $16.67
 $25,000  $250  $250.00  $20.83
 $30,000  $300  $300.00  $25.00
 $35,000  $350  $350.00  $29.17
 $40,000  $400  $400.00  $33.33
 $45,000  $450  $450.00  $37.50
 $50,000  $500  $500.00  $41.67
 $55,000  $550  $550.00  $45.83
 $60,000  $600  $600.00  $50.00
 $65,000  $650  $650.00  $54.17
 $70,000  $700  $700.00  $58.33
 $75,000  $750  $750.00  $62.50
 $80,000  $800  $800.00  $66.67
 $85,000  $850  $850.00  $70.83
 $90,000  $900  $900.00  $75.00
 $95,000  $950  $950.00  $79.17
 $100,000  $1,000  $1,000.00  $83.33

 

Obamacare Tax Penalty for 2015

The following table estimates the Obamacare tax penalty for a single taxpayer who is uninsured for the entire year in 2015. As discussed above, "income" is the amount earned in excess of $10,300, the income tax filing threshold for an individual in 2015. 

Annual Income Over $10, 300  2% of income    2015 Obamacare Tax    Per Month 
 $-    N/A     $0    $0  
 $5,000.00  $100.00  $325.00  $27.08
 $10,000.00  $200.00  $325.00  $27.08
 $15,000.00  $300.00  $325.00  $27.08
 $20,000.00  $400.00  $400.00  $33.33
 $25,000.00  $500.00  $500.00  $41.67
 $30,000.00  $600.00  $600.00  $50.00
 $35,000.00  $700.00  $700.00  $58.33
 $40,000.00  $800.00  $800.00  $66.67
 $45,000.00  $900.00  $900.00  $75.00
 $50,000.00  $1,000.00  $1,000.00  $83.33
 $55,000.00  $1,100.00  $1,100.00  $91.67
 $60,000.00  $1,200.00  $1,200.00  $100.00
 $65,000.00  $1,300.00  $1,300.00  $108.33
 $70,000.00  $1,400.00  $1,400.00  $116.67
 $75,000.00  $1,500.00  $1,500.00  $125.00
 $80,000.00  $1,600.00  $1,600.00  $133.33
 $85,000.00  $1,700.00  $1,700.00  $141.67
 $90,000.00  $1,800.00  $1,800.00  $150.00
 $95,000.00  $1,900.00  $1,900.00  $158.33
 $100,000.00  $2,000.00  $2,000.00  $166.67

Learn More

You can find an online calculator to help you determine your potential tax penalty at the Tax Policy Center.

For a highly detailed look at the Affordable Care Act tax penalty, see the Congressional Research Report, Individual Mandate and Related Information Requirements Under PPCA.

To learn about what qualifies as health coverage under Obamacare and whether you are exempt, see Do I Have to Get Obamacare in New York?

To find out how to obtain coverage, see How Do I Get Obamacare in New York?

For information about costs, see How Much Does Obamacare Cost in New York?


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