Beginning in 2014, the Affordable Care Act requires most Americans to have health insurance coverage or pay a penalty when they file their taxes. The penalty is the greater of a flat dollar amount or a percentage of your household income, and it increases every year. Here are the penalty amounts for 2016:
Flat Dollar Calculation: $695 per adult, $347.50 per child, capped at $2,085 per family
Percentage of Income Calculation: 2.5% of applicable income, capped at the national average premium for a bronze-level plan in the individual marketplace ($207 per month in 2015) times the number of family members up to 5. When calculating the percentage of income calculation, subtract the tax filing threshold from the household income and multiply by .025. For most people under age 65, the tax filing threshold in 2016 will be $10,450 for single filers and $20,900 for joint filers.
For more information on the Individual Shared Responsibility Payment, refer to the Instruction Booklet for IRS Publication 8965. Note that the IRS currently has draft forms for 2015 available and the information for 2016 won’t be published for another year or so.