A Web Tool to Calculate ACA Tax Penalties

By :: March 6th, 2014

The deadline is looming: If you don’t have approved insurance coverage by March 31 (and are not exempt from the requirement), the Affordable Care Act will hit you with a penalty on your 2014 income tax return. It is often said the tax is $95, but for many people it will be much more. A new calculator from the Tax Policy Center shows just how big it could be.

For a single person who makes enough in 2014 to file a 1040, the penalty can be as little as $95 or as much as $3,600, depending on income. For families, the penalty is much larger: A couple with two children could owe between $285 and $11,000.

My TaxVox post last November explained what determines the penalty. For low-income households, it’s a fixed dollar amount: $95 per adult plus $47.50 per child, up to a total of $285. Higher-income families will owe 1 percent of their income (net of specified deductions), up to the average national cost of getting basic (bronze level) insurance coverage for all family members. According to the Urban Institute’s Health Policy Center, that coverage will cost about $3,600 per adult plus $1,900 per child in 2014.

The penalty will be higher in subsequent years—2 percent of income with a minimum of $325 in 2015 and 2.5 percent of income but at least $695 in 2016 (again with a cap equal to the average premium for bronze plans in each year).

Take the calculator out for a spin and see how big the penalty can be. But be warned:  It’s almost always more than that widely-cited $95.

And after you've checked out TPC's calculator to see what people will pay if they don't enroll, you can use the Kaiser Family Foundation's subsidy calculator to find out how big a subsidy they'd get if they do sign up for a plan.


  1. AMTbuff  ::  5:17 pm on March 6th, 2014:

    After all the other waivers and delays that the Administration has granted illegally, typically by promising not to enforce the law, there is approximately zero chance that the individual mandate/penalty/tax will be enforced for 2014. During the government shutdown debate, Obama missed a golden opportunity to blame that delay on the Republicans.

    The most likely scenario is a 2-year delay. That would push the first payment of the penalty past the 2016 election. Most of the other delay decisions have been motivated by election politics, so this prediction is easy.

  2. Len Burman  ::  2:02 pm on March 7th, 2014:

    Probably not true, Buff. As long as the information reporting works — and the IRS is pretty good at processing information return — they will be able to reduce refunds by the penalty amount for tax filers with large enough refunds. Beyond that, they have limited enforcement ability, which was by design, but there will be some enforcement of the penalty.

  3. Michael Bindner  ::  3:53 am on March 9th, 2014:

    The fun scenarios exist when one spouse works (like my wife) at a job that offers insurance and the other works part time at the minimum wage with no insurance – and the wife covers the child and herself but not the husband she is planning to divorce. The tax situation is sticky, but the ability to access Obamacare is stickier – although I should treat it as a research project and call the helpline. If Virginia had expanded Medicaid it would be much easier – or not.

  4. ObamaCare Tax Penalty: Families Could Owe Up To $11,000 | John Goodman’s Health Policy Blog | NCPA.org  ::  12:47 pm on March 10th, 2014:

    […] The Tax Policy Center has launched a Tax Penalty Calculator, which any individual can easily use to determine his or her ObamaCare tax liability. According to Roberton Williams: […]

  5. Calculating ACA Penalties, More Love for the EITC  ::  2:03 am on March 11th, 2014:

    […] But the Affordable Care Act still requires many without insurance to pay a penalty tax.  Bob Williams explains and shares a new TPC calculator that figures those ACA penalties. Chances are, they’re a bit […]

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