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Individual Shared Responsibility Provision – Reporting and Calculating the Payment

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The individual shared responsibility provision of the Affordable Care Act requires you and each member of your family to have qualifying health care coverage (called minimum essential coverage), qualify for a coverage exemption, or make an individual shared responsibility payment when you file your federal income tax return.

 

Determining if You Need to Make a Payment

Calculating the Payment

Making the Payment with Your Return

 

Determining if You Need to Make a Payment

You are required to make a payment for the months that you and  any family members do not have minimum essential coverage or a coverage exemption when you file your tax return. To find out if you qualify for an exemption or must make a payment use our interactive tool, Am I eligible for a coverage exemption or required to make an Individual Shared Responsibility Payment? Also, see the Individual Shared Responsibility Payment Estimator

Calculating the Payment

If you have to make a payment, you can use the worksheets located in the instructions to Form 8965, Health Coverage Exemptions, to figure the shared responsibility payment amount due.  Filing electronically is the easiest way to file a complete and accurate tax return. The software guides you through the process. IRS assistors cannot calculate the shared responsibility payment for you.

The annual payment amount is either a percentage of your household income in excess of the return filing threshold or a flat dollar amount, whichever is greater.  If you have coverage or an exemption for only part of the year, you will prorate your payment for an amount less than the annual payment. The amount you will have to pay may be limited depending on your circumstances.

2014, 2015 and 2016

Annual Payment Amounts

 

Year 2014

Year 2015

Year 2016

Percentage amount

 1% of income above filing threshold*

2% of income above filing threshold*

2.5% of income above filing threshold*

Flat dollar amount**

$95 per adult

$47.50 per child

Family maximum: $285

$325 per adult

$162.50 per child

Family maximum: $975

$695 per adult

$347.50 per child

Family maximum: $2,085

Your payment amount is capped at the cost of the national average premium for a bronze level health plan available through the Marketplace. For 2015, the annual national average premium for a bronze level health plan available through the Marketplace is $2,484 per year ($207 per month) for an individual and $12,240 per year ($1,020 per month) for a family with five or more members.

* Filing Threshold: The minimum amount of gross income an individual of your age and with your filing status (e.g., single, married filing jointly, head of household) must make to be required to file a tax return.

**After year 2016, the flat dollar amounts are based on the 2016 amounts plus an inflation adjustment.. 

 

Calculating your payment requires you to know your household income and your tax return filing threshold.

  • Household income is the modified adjusted gross income of you, your spouse (if filing jointly), and any dependents who are required to file a tax return.  Modified adjusted gross income is the adjusted gross income from the tax return plus any excludible foreign earned income and tax-exempt interest received during the taxable year.
  • Tax return filing threshold is the minimum amount of gross income an individual of your age and with your filing status must make to be required to file a tax return.

2015 Federal Tax Filing Requirement Thresholds

Filing Status Age Must File a Return If Gross Income Exceeds
Single Under 65 $10,300
  65 or older $11,850
Head of Household Under 65 $13,250
  65 or older $14,800
Married Filing Jointly  Under 65 (both spouses) $20,600
  65 or older (one spouse) $21,850
  65 or older (both spouses) $23,100
Married Filing Separately  Any age $4,000
Qualifying Widow(er) with Dependent Children Under 65 $16,600
  65 or older $17,850

 

If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption. Therefore, you do not need to file a return solely to report your coverage or to claim a coverage exemption. If your income is below the filing threshold for your filing status and you choose to file a tax return, you will use Part II of Form 8965, Coverage Exemptions for Your Household Claimed on Your Return, to claim a coverage exemption. You should not make a shared responsibility payment if you are exempt from the coverage requirement because you have income below the filing threshold.

Making the Payment with Your Return

The amount due is reported on Form 1040 in the Other Taxes section, and in the corresponding sections of Form 1040A and 1040EZ.  You only make a payment for the months you or your dependents did not have coverage or qualify for a coverage exemption.

If you also need to report an exemption for any month during the year, see our Claiming and Reporting an Exemption page for more information about how to report or claim an exemption on your tax return.

If you did not have coverage and your income was below the tax filing threshold for your filing status, you qualify for a coverage exemption and you should not make a payment.   

Examples

You can figure your shared responsibility payment using the worksheet included in the instructions for Form 8965, Health Coverage Exemptions. Tax preparation software can also help you calculate your payment when filing electronically. When you are figuring out your shared responsibility payment, make sure you use the correct percentage amount to calculate the payment.

The examples below represent the mechanics of calculating the payment and are not estimates of current or future health insurance premium costs. To help estimate the amount of your payment, check out the Individual Shared Responsibility Payment Estimator.  

The monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through Exchanges in 2015 is $207 per individual. 

Example 1: Single individual with $40,000 income

Jim, an unmarried individual with no dependents, does not have minimum essential coverage for any month during 2015 and does not qualify for an exemption. For 2015, Jim’s household income is $40,000 and his filing threshold is $10,300.

  • To determine his payment using the income formula, subtract $10,300 (filing threshold) from $40,000 (2015 household income). The result is $29,850. Two percent of $29,850 equals $597.
  • Jim’s flat dollar amount is $325.

Jim’s annual national average premium for bronze level coverage for 2015 is $2,484. Because $597 is greater than $325 and is less than $2,4484 Jim’s shared responsibility payment for 2015 is $597, or $49.75 for each month he is uninsured (1/12 of $597 equals $49.75).

Jim will make his shared responsibility payment for the months he was uninsured when he files his 2015 income tax return.

Example 2: Married couple with 2 children, $70,000 income

Eduardo and Julia are married and have two children under 18. They do not have minimum essential coverage for any family member for any month during 2015 and no one in the family qualifies for an exemption. For 2015, their household income is $70,000 and their filing threshold is $20,600.

  • To determine their payment using the income formula, subtract $20,600 (filing threshold) from $70,000 (2015 household income). The result is $49,700. Two percent of $49,700 equals $994.
  • Eduardo and Julia’s flat dollar amount is $975, or $325 per adult and $162.50 per child. The total of $975 is the flat dollar amount in 2015.

The family’s annual national average premium for bronze level coverage for 2015 is $9,936 ($2,484 x 4). Because $994 is greater than $975 and is less than $9,936, Eduardo and Julia’s shared responsibility payment is $994 for 2015, or $82.83 per month for each month the family is uninsured (1/12 of 994 equals $82.83).

Eduardo and Julia will make their shared responsibility payment for the months they and their children were uninsured when they file their 2015 income tax return.

Page Last Reviewed or Updated: 02-Aug-2016