Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Affordable Care Act Workout

Shared Responsibility Payment

Case Study 1: Calculating the Payment

Jim, an unmarried 30-year-old with no dependents, did not have MEC for any month during 2018 and does not qualify for a coverage exemption. For 2018, Jim's household income was $40,000 and his filing threshold is $12,000.

  • To determine his monthly payment amount using the income formula, subtract $12,000 (filing threshold) from $40,000 (2018 household income). The result is $28,000. Two and a half percent of $28,000 equals $700.
  • Jim's flat dollar amount is $695.

Because $700 is greater than $695, Jim's payment amount for each month is $58.33, or 1/12 of the $700 amount. For Jim, the sum of all monthly payment amounts is $700.

What is Jim's shared responsibility payment?