The PPACA Penalty Fee in 2014 Misinformation

A lot of people think that all they have to pay is $95 in 2014 to get around the PPACA. The $95 penalty is true if you make < $19,650 in Household  income and this comes after your deduction of $10,150. The individual shared responsibility payment is capped at the cost of the national average premium for the bronze level health plan available through the Marketplace in 2014.

The penalty in 2014 is calculated one of 2 ways. You’ll pay whichever of these amounts is higher:

  • 1% of your yearly household income. (Only the amount of income above the tax filing threshold, $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average yearly premium for a bronze plan.

  • $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

The way the penalty is calculated, a single adult with household income below $19,650 would pay the $95 flat rate. A single adult with household income above $19,650 would pay an amount based on the 1 percent rate. (If income is below $10,150, no penalty is owed.)

The Individual Shared Responsibility Payment – An IRS Overview

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