Penalties &  Exemptions - Affordable Care Act

Starting in 2014 individuals may face a tax penalty for not having health insurance coverage under the Affordable Care Act.   

The Penalties are Listed below:

2014:   The penalty is the greater of 1% of household income or a flat dollar penalty of $95 per person and $47.50 per child under 18.  Flat dollar penalty is capped at $285 for 2014.

2015:  The penalty is the greater of 2% of household income or a flat dollar penalty of $325 per person and $162.50 per child under 18.  Flat dollar penalty is capped at $975 for 2015.

2016:  The penalty is the greater of 2.5% of household income or a flat dollar penalty of $695 per person and $347.50 per child under 18.  Flat dollar penalty is capped at $2,085. 

                                You may be Exempt from the Penalty

Taxpayers and dependents that do not have insurance coverage may qualify for a penalty exemption.  Some hardship exemptions may be claimed on the tax return without prior approval.   Other hardship exemptions require approval from the government exchange.  Every eligible taxpayer and dependent listed on the tax return will need to claim an exemption on the tax return.   If you need to apply for an exemption we can help you prepare an application for exemption from penalty.  We have also provided a link to obtain the form to apply for an exemption under the tab Application for Exemption.

Hardship Exemptions that may be Claimed on the Tax Return without Prior Approval

  •  1.  Insurance coverage that exceeds 8% of household income under a bronze plan.
  •  2.  Short coverage gap of less than 3 consecutive months.
  •  3.  Citizens living abroad during the year for 330 days outside the U.S.
  •  4.  Non U.S. citizen or an alien not lawfully present in the U.S.
  •  5.  Taxpayers whose household income is below the filing threshold.
  •  6.  Members of a health sharing ministry.
  •  7.  Members of certain recognized religious sects.
  •  8.  Two or more family members employer coverage exceeds 8% of household income.
  •  9.  Incarceration.
  • 10.  Member of a federally recognized tribe.   

    Hardship Exemptions that must be Applied for Through the Government Exchange

  •  1.  If you are homeless.
  •  2.  Have had an eviction or foreclosure in the past 6 months.
  •  3.  Received a shutoff notice from a utility company.
  •  4.  Individuals who have experienced domestic violence.
  •  5.  Recent death of a close family member.
  •  6.  Experienced natural disaster causing damage to property.
  •  7.  Filing for bankruptcy in the last 6 months.
  •  8.  Incurring medical expenses in past 24 months resulting in substantial debt.
  •  9.  Incurring expenses due to caring for an ill, disabled, or aging family member.
  • 10.  Children denied coverage by Medicaid or CHIP.
  • 11.  Individuals not eligible for Medicaid because their state did not expand eligibility.
  • 12.  Individuals whose plan was canceled & marketplace plans are unaffordable.
  • 13.  As a result of eligibility appeals decision, you were eligible for lower cost plans.
  • 14.  Other hardships in obtaining health insurance.