ACA Shared Responsibility Payment: What You Need to Know

The Affordable Care Act (ACA) requires most Americans to have health insurance. If you don’t have health insurance, you may have to pay a shared responsibility payment (SRP) when you file your taxes. The SRP is a fee that helps to offset the cost of providing health insurance to low-income Americans.

The SRP is calculated based on your income and the number of months you were uninsured. For 2023, the SRP is $695 per adult and $347.50 per child. However, the SRP is capped at a certain percentage of your income. For 2023, the cap is 2.5% of your household income.

There are a number of exemptions to the SRP. You may be exempt if you:

Were uninsured for less than three months
Had a qualifying hardship, such as a job loss or a medical emergency
Were incarcerated
Were a member of a religious sect that opposes health insurance
Were a low-income American who received Medicaid or CHIP

If you meet one of these exemptions, you can file Form 8965 with your taxes to claim the exemption.

If you don’t qualify for an exemption, you can reduce your SRP by getting health insurance. You can purchase health insurance through the Marketplace or through a private insurer. If you get health insurance, you will need to provide proof of coverage to the IRS when you file your taxes.

If you don’t have health insurance and you don’t qualify for an exemption, you will have to pay the SRP. The SRP is a significant fee, so it’s important to make sure you have health insurance.

How to Avoid the Shared Responsibility Payment

There are a few things you can do to avoid the SRP:

Get health insurance. This is the best way to avoid the SRP. You can purchase health insurance through the Marketplace or through a private insurer.
Qualify for an exemption. There are a number of exemptions to the SRP. You may be exempt if you:
Were uninsured for less than three months
Had a qualifying hardship, such as a job loss or a medical emergency
Were incarcerated
Were a member of a religious sect that opposes health insurance
Were a low-income American who received Medicaid or CHIP
File Form 8965 with your taxes. If you meet one of these exemptions, you can file Form 8965 with your taxes to claim the exemption.

If you don’t have health insurance and you don’t qualify for an exemption, you will have to pay the SRP. The SRP is a significant fee, so it’s important to make sure you have health insurance.

Need Help?

If you need help finding health insurance or determining if you qualify for an exemption, you can contact a licensed agent. A licensed agent can help you compare health insurance plans and find the best plan for your needs.