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Uninsured Face ACA Penalty Tax for 2014

Feb 20, 2015

For the first time, American tax filers are facing the ACA individual mandate penalty for 2014. If you didn’t have health coverage for all or part of 2014, you have to either qualify for a health coverage exemption or pay a fee with your 2014 federal income tax return.

Americans who do not qualify for an exemption and went without health coverage in 2014 will have to pay a fee – $95 per adult or 1 percent of their income, whichever is greater – when they file their taxes this year. Many uninsured tax payers will have to pay the 1% of income penalty which adds up to more than they anticipated.  Estimate your penalty with this free ACA Tax Penalty Calculator.

If you didn’t have health coverage for all of 2014, you’ll pay the higher of:

•An amount that depends on your income. Generally it’s 1% of your yearly household income above a certain amount — $10,150 for an individual, $20,300 for a married couple filing jointly.

•Or a minimum of $95 per person who didn’t have coverage ($47.50 per child under 18). The maximum fee per family using this method is $285.

If you had medical coverage starting in May 2014 or earlier, you qualify for an exemption for the months before your coverage started. Individuals who applied during a later Special Enrollment Period will still owe a fee for the months they were uninsured and did not receive an exemption in 2014.  

Claiming a health coverage exemption:
Find out if you qualify for an exemption and learn how to apply.

You can claim some exemptions when you complete your federal tax return. You claim others by filling out and mailing in a paper application to the Marketplace.

When you claim an exemption with your tax return, you’ll fill out a new form, Form 8965, Health Coverage Exemptions. Learn more by downloading the forms below.

Get coverage for 2015
The penalty fee increases substantially in 2015 for the uninsured. Open Enrollment for 2015 closed on February 15, 2015 but the Centers for Medicare & Medicaid Services (CMS) announced on February 20th a special enrollment period (SEP) for individuals and families who did not have health coverage in 2014 and are subject to the fee or “shared responsibility payment” when they file their 2014 taxes in states which use the Federally-facilitated Marketplaces (FFM). This special enrollment period will allow those individuals and families who were unaware or didn’t understand the implications of this new requirement to enroll in 2015 health insurance coverage through the FFM unit March 15, 2015.

If you don't apply by that date then you can get health coverage for 2015 only if you have life change that qualifies you for a Special Enrollment Period or for if you’re eligible for Medicaid or the Children’s Health Insurance Program. Most people who apply get premium tax credits that reduce the cost of their monthly premiums.Learn more about enrolling in 2015 coverage with a Special Enrollment Period.

Source: HeathCare.gov, News Release - February 20, 2015

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