Health Care: Individual Responsibility (Individual Shared Responsibility Payment)
The new tax law didn’t change the individual shared responsibility payment (ISRP) for tax year 2018 (except for the annual inflation adjustments), but it reduced the payment to $0 for tax years after 2018.
The ISRP in the Affordable Care Act requires you, your spouse, and your dependents to have one of the following:
- Qualifying health care coverage for each month of the year,
- Qualify for a health coverage exemption, or
- Make an Individual Shared Responsibility Payment when filing your federal income tax return.
In general, the annual payment amount is the greater of a percentage of your household income or a flat dollar amount, but is capped at the national average premium for a bronze level health plan available through the Marketplace. You will owe 1/12th of the annual payment for each month you or your dependents don’t have either coverage or an exemption.
|The new tax law didn’t change the ISRP for tax year 2018 (except for the annual inflation adjustments). However, it reduced the payment to $0 for tax years beginning after December 31, 2018.|
How will this affect me?
Anthony and Addison are married and file a joint tax return. In 2018, they had required health care coverage through June 30th. However, they didn’t have health care coverage from July 1st through the end of the year. Unless they qualify for a health coverage exemption for the months without coverage, they will need to calculate the amount of ISRP due for those months on the worksheets located in the instructions to IRS Form 8965, Health Coverage Exemptions.
Same as above, except Anthony and Addison had coverage through October 31st and didn’t have health care coverage for the last two months of the year. They qualify for an exemption due to a short coverage gap and report this exemption on IRS Form 8965, Health Coverage Exemptions. Because they qualify for an exemption, they don’t need to report the ISRP on their 2018 tax return.