The penalty’s cost is calculated in one of two ways: You’ll either pay a percentage of your total household adjusted gross income — which you’ll figure on your annual tax return — or a flat rate, whichever is greater. Your tax return will also help you determine your penalty amount.

Each year, the penalty will increase to keep pace with inflation and encourage people to buy coverage.

  • For tax year 2015, the ACA penalty is 2% of your total household adjusted gross income, or $325 per adult and $162.50 per child, to a maximum of $975.
  • For tax year 2016, the penalty will rise to 2.5% of your total household adjusted gross income, or $695 per adult and $347.50 per child, to a maximum of $2,085.
  • For tax year 2017 and beyond, the percentage option will remain at 2.5%, but the flat fee will be adjusted for inflation.