For the 2015 tax year, the Obamacare or Affordable Care Act (ACA) shared responsibility is set to double from a maximum $975 per household in 2014 to approximately $12,850 per household. This is based on the percentage of income criteria, versus the flat tax/penalty amount outlined below. To avoid being subject to this penalty individuals and households need to ensure they can provide proof of health insurance coverage or hope that they are covered by one or more exemptions.
The reason for the significantly higher maximum limit in 2015 is that that percentage-of-income penalty doubles to 2% from 1% for the 2015 tax year. Per the IRS the penalty tax for not having coverage in 2015 is is the higher of these amounts:
Percentage of Income Penalty (benefits those with lower incomes)
- 2% of household income
- Maximum: Total yearly premium for the national average price of a Bronze plan sold through the health insurance marketplace (approx. $12,850*)
OR Flat Penalty Amount
- $325 per adult
- $162.50 per child under 18
- Maximum: $975
Taxpayers owe either a flat assessment or a percentage of income, whichever is higher.
*The average price of a bronze plan is just an estimate based on recent figures and maybe more or less. The IRS will release the final maximum threshold. This means you’ll find out your actual penalty only when you file your 2016 federal tax return.