Per IRS Publication 5187
, Health Care Law: What's New for Individuals & Families
:(Page 5): Individual Shared Responsibility Provision
What is the individual shared responsibility provision?
For each month of the year, the individual shared responsibility provision calls for individuals to:
(Page 7): What is the individual shared responsibility payment?
- Have qualifying health care coverage (also called minimum essential coverage), or
- Qualify for an exemption from coverage, or
- Make a individual shared responsibility payment when filing their federal income tax return
If anyone in the taxpayer's tax household does not have minimum essential coverage, and does not qualify for a coverage exemption, the taxpayer will need to make an individual shared responsibility payment (SRP) when filing their federal income tax return.
Although the process to determine the individual shared responsibility payment is described in detail below, using tax preparation software is an easy way to determine the payment.
The annual SRP amount is the greater of a percentage of household income or a flat dollar amount, whichever is greater, but is capped at the national average premium for a bronze level qualified health plan available through the Marketplace that would cover everyone in the tax household who does not have coverage and does not qualify for a coverage exemption.
Taxpayers owe 1/12th of the annual SRP for each month they or their dependent(s) do not have coverage and do not qualify for an exemption.
The annual SRP amount is the greater of:
- 2.5 percent of your household income that is above the tax return filing threshold for your filing status, or
- The family's flat dollar amount, which is $695 per adult and $347.50 per child (under age 18), limited to a family maximum of $2085. These amounts may be adjusted for inflation.
The SRP is capped at the national average premium for a bronze level qualified health plan available through the Marketplace that would cover everyone in the tax household who does not have coverage and does not qualify for a coverage exemption. For 2016, the annual national average premium for a bronze level health plan available through the Marketplace is $2,676 per year ($223 per month) for an individual and $13,380 per year ($1,115 per month) for a family with five or more members.
For information on the cost of bronze level plans, visit HealthCare.gov. For more information refer to the Penalty site.
To enter or review your individual shared responsibility provision information in the TaxAct program:
- From within your TaxAct return (Online or Desktop), click on the Federal tab. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal.
- Click Health Insurance to expand the category and then click Coverage information
- The program will proceed with the interview questions for you to enter or review the appropriate information
- On the screen titled Health Insurance - Coverage Summary you can review your Individual Shared Responsibility Payment