2014 Health Care Penalty Calculator
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Reviewed by Calculator Editorial Team
The 2014 Health Care Penalty Calculator helps you determine your individual shared responsibility payment for not having health insurance coverage during 2014. This penalty was established under the Affordable Care Act (ACA) to encourage Americans to obtain health insurance.
How the Penalty is Calculated
The penalty amount is based on your household size and income level. The calculation follows these steps:
- Determine your household size (number of people in your tax unit).
- Calculate your tax household income (total income of all household members).
- Find your income level bracket based on your household size.
- Apply the appropriate penalty percentage to your tax household income.
Formula
Penalty Amount = (Tax Household Income - Income Threshold) × Penalty Percentage
Where:
- Tax Household Income = Total income of all household members
- Income Threshold = The minimum income level for your household size
- Penalty Percentage = 1% for incomes between 100% and 400% of the federal poverty level, 2% for incomes above 400%
Note: The penalty was only applicable to individuals who did not have qualifying health insurance coverage for the entire year and were not exempt from the penalty.
Penalty Examples
Let's look at two examples to illustrate how the penalty is calculated.
Example 1: Single Person with Income $15,000
For a single person with an income of $15,000:
- Household size: 1
- Federal poverty level for 1 person: $11,490
- Income threshold: 100% of poverty level = $11,490
- Penalty percentage: 1% (since income is between 100% and 400% of poverty level)
- Penalty amount: ($15,000 - $11,490) × 1% = $351
Example 2: Family of Four with Income $50,000
For a family of four with an income of $50,000:
- Household size: 4
- Federal poverty level for 4 people: $23,500
- Income threshold: 100% of poverty level = $23,500
- Penalty percentage: 1% (since income is between 100% and 400% of poverty level)
- Penalty amount: ($50,000 - $23,500) × 1% = $2,650
Penalty Table
The following table shows the penalty amounts for different household sizes and income levels in 2014.
| Household Size | Income Level | Penalty Percentage | Example Penalty |
|---|---|---|---|
| 1 | $11,490 - $45,960 | 1% | $351 for $15,000 income |
| 1 | Above $45,960 | 2% | $702 for $50,000 income |
| 2 | $15,760 - $63,040 | 1% | $400 for $20,000 income |
| 2 | Above $63,040 | 2% | $800 for $50,000 income |
| 3 | $19,250 - $77,520 | 1% | $500 for $25,000 income |
| 3 | Above $77,520 | 2% | $1,000 for $60,000 income |
| 4 | $23,500 - $93,800 | 1% | $600 for $30,000 income |
| 4 | Above $93,800 | 2% | $1,200 for $70,000 income |
Frequently Asked Questions
Who was eligible for the 2014 health care penalty?
The penalty applied to individuals who were not exempt and did not have qualifying health insurance coverage for the entire 2014 tax year. Exemptions included having coverage for at least one month, being enrolled in Medicare, being incarcerated, or having a hardship exemption.
How was the penalty paid?
The penalty was paid as part of your federal income tax return using IRS Form 8965. You could also pay it with your 2014 federal income tax payment or make estimated tax payments throughout the year.
Was the penalty refundable?
No, the penalty was not refundable. It reduced your tax refund or increased the amount you owed when filing your tax return.
Could I appeal the penalty?
Yes, you could appeal the penalty if you believed it was applied incorrectly. The IRS provided an appeals process for individuals who wanted to challenge their penalty assessment.