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IRS Health Care Tax Penalty

Starting January 2014, you and your family were required to either have health insurance coverage throughout the year, qualify for an exemption from coverage, or make a payment when you file your 2014 federal income tax return in 2015. Many people already have qualifying health insurance coverage and do not need to do anything more than maintain that coverage in 2014.

The fee you pay if you don't have health coverage

The fee for not having health coverage is calculated one of 2 ways. If you or your dependents don’t have insurance that qualifies as minimum essential coverage you'll pay either a percentage of your household income or a flat fee -- whichever is higher.

The fee in 2015

If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:

  • 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
  • $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975.

The fee for not having coverage in 2014

If you didn’t have coverage in 2014, you’ll pay one of these two amounts when you file your 2014 federal tax return:

  • 1% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
  • $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

The fee after 2015

The penalty increases every year. In 2016 it’s 2.5% of income or $695 per person. After that it's adjusted for inflation.

How you pay the fee

You’ll pay the fee on the federal income tax return you file for the year you don’t have coverage. Most people will file their 2014 returns in early 2015 and their 2015 returns in early 2016.

Learn more about the individual shared responsibility payment from the Internal Revenue Service.